SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 19, 1996
ARIZONA PUBLIC SERVICE COMPANY
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(Exact name of registrant as specified in its charter)
Arizona 1-4473 86-0011170
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona 85004
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(Address of principal executive offices) (Zip code)
(602) 250-1000
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(Registrant's telephone number, including area code)
NONE
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(Former name or former address, if changed since last report)
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Item 7. Financial Statement, Pro Forma Financial Information and
Exhibits
(c) Exhibits.
The Registrant hereby files the following Exhibit to its
Registration Statements on Form S-3 (Nos. 33-61228, 33-55473, 33-64455 and
333-15379) which were declared effective on April 26, 1993, October 3, 1994,
December 22, 1995 and November 14, 1996, respectively.
Exhibit
No. Description
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1.3 Distribution Agreement and related Terms Agreement, each dated
November 19, 1996, in connection with the offering of
$100,000,000 of 6-3/4% Senior Notes Due 2006.
4.1 Fifty-fourth Supplemental Indenture dated as of November 15,
1996, relating to the issuance of $100,000,000 of the
Company's First Mortgage Bonds, Senior Note Series A.
4.2 Specimen of Bond of First Mortgage Bonds, Senior Note Series
A.
4.5 Indenture dated as of November 15, 1996 among the Company and
The Bank of New York, as Trustee.
4.6 First Supplemental Indenture dated as of November 15, 1996
relating to the issuance of $100,000,000 of 6-3/4% Senior
Notes Due 2006.
4.7 Specimen of Note of 6-3/4% Senior Notes Due 2006.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
Dated: November 21, 1996 By: Nancy E. Newquist
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Nancy E. Newquist
Treasurer
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Exhibit 1.3
$175,000,000
ARIZONA PUBLIC SERVICE COMPANY
Medium-Term Notes
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DISTRIBUTION AGREEMENT
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(For Senior Notes)
November 19, 1996
Ladies and Gentlemen:
1. Introduction. Arizona Public Service Company, an Arizona
corporation (the "Company"), confirms its agreement with each of you
(individually, a "Distributor" and collectively, the "Distributors") with
respect to the issue and sale from time to time by the Company of its
medium-term notes registered under the registration statements referred to in
Section 2(a) and described in the combined prospectus relating to such
registration statements as "Senior Notes" (any such medium-term notes being
hereinafter referred to as the "Securities," which expression shall, if the
context so admits, include any permanent global Security). Securities may be
offered and sold pursuant to Section 3 of this Agreement in an aggregate amount
not to exceed the amount of Registered Securities (as defined in Section 2(a)
hereof) registered pursuant to such registration statements reduced by the
aggregate amount of any other Registered Securities sold otherwise than pursuant
to Section 3 of this Agreement. The Securities will be issued under an
Indenture, dated as of November 15, 1996 (the "Basic Indenture"), between the
Company and The Bank of New York, as trustee (the "Trustee"), as the same may be
amended by one or more additional Supplemental Indentures relating to the
Securities (each a "Supplemental Indenture," and collectively, the "Supplemental
Indentures") (the Basic Indenture, as amended and supplemented by such
Supplemental Indentures, is hereinafter referred to as the "Indenture"). Subject
to Article 14 of the Basic Indenture, prior to the Release Date (as defined in
the Basic Indenture), the Securities will be secured by the Company's first
mortgage bonds (the "Senior Note Mortgage Bonds") issued pursuant to the
Mortgage and Deed of Trust dated as of July 1, 1946, to The Bank of New York, as
successor Trustee, as amended and supplemented by fifty-three
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indentures supplemental thereto (the "Basic Mortgage"), and as further amended
and supplemented by one or more additional supplemental indentures relating
thereto (each a "Mortgage Supplemental Indenture" and collectively, the
"Mortgage Supplemental Indentures") (the Basic Mortgage as amended and
supplemented by such Mortgage Supplemental Indentures, is hereinafter referred
to as the "Mortgage").
The Securities shall have the terms described in the
Prospectus referred to in Section 2(a) as it may be amended or supplemented from
time to time, including any supplement to the Prospectus that sets forth only
the terms of a particular issue of the Securities (a "Pricing Supplement").
Securities will be issued, and the terms thereof established, from time to time
by the Company in accordance with the Indenture and the Procedures (as defined
in Section 3(d) hereof).
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Distributor as follows:
(a) A registration statement (No. 33-55473) relating to
$25,000,000 of the Company's first mortgage bonds (the "Bonds") or
unsecured debentures, notes or other evidences of indebtedness (the
"Unsecured Securities"), a registration statement (No. 33-64455)
relating to $25,000,000 of Bonds or Unsecured Securities, a
registration statement (No. 33-61228) relating to $100,000,000 of
Bonds, and a registration statement (No. 333-15379) relating to
$25,000,000 of Bonds, Unsecured Securities, or Securities (together,
the "Registered Securities") (including a combined prospectus relating
to up to $175,000,000 of Bonds, Unsecured Securities or Securities),
were filed with the Securities and Exchange Commission (the
"Commission") and have become effective. Such registration statements,
as each is amended as of the Closing Date (as defined in Section 3(e)
hereof), are hereinafter referred to as the "First Registration
Statement," the "Second Registration Statement," the "Third
Registration Statement," and the "Fourth Registration Statement,"
respectively, and, together with any related Rule 462(b) registration
statement or amendment thereto, are hereinafter referred to
collectively as the "Registration Statements," and such prospectus, as
amended or as supplemented as of the Closing Date, including all
material incorporated by reference therein, is hereinafter referred to
as the "Prospectus." Any reference in this Agreement to amending or
supplementing the Prospectus shall be deemed to include the filing of
materials incorporated by reference in the Prospectus after the Closing
Date and any reference in this Agreement to any amendment or supplement
to the Prospectus shall be deemed to include any such materials
incorporated by reference in the Prospectus after the Closing Date.
(b) Each part of the Registration Statements, when such part
became effective, conformed in all material respects to the
requirements of the Securities Act of 1933 (the "Act"), the Trust
Indenture Act of 1939 (the "Trust Indenture Act"), and the rules and
regulations (the "Rules and Regulations") of the Commission and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the Closing Date and at each
of the
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times of acceptance and of delivery referred to in Section 6(a) hereof
and at each of the times of amendment or supplementing referred to in
Section 6(b) hereof (the Closing Date and each such time being herein
sometimes referred to as a "Representation Date"), the Registration
Statements and the Prospectus will conform in all material respects to
the requirements of the Act, the Trust Indenture Act, and the Rules and
Regulations, and at such date none of such documents will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing does not
apply to (a) statements in or omissions from any such documents based
upon written information furnished to the Company by any Distributor
specifically for use therein or (b) that part of the Fourth
Registration Statement that consists of the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of 1939 of
The Bank of New York, as Trustee under the Basic Indenture.
(c) An order of the Arizona Corporation Commission shall have
been granted authorizing (i) the execution and delivery of the
Supplemental Indenture relating to any series of Securities issued and
sold by the Company hereunder, (ii) the execution and delivery of the
Mortgage Supplemental Indenture, pursuant to which the Senior Note
Mortgage Bonds securing such Securities will be issued, and (iii) the
issuance and sale of such Securities on the terms and conditions herein
and in the Prospectus or in any Terms Agreement (as defined in Section
3(b)) relating to such Securities, and the approval or consent of no
other public body or authority is necessary to the execution and
delivery of such Supplemental Indenture or Mortgage Supplemental
Indenture or the validity of the issuance and sale of such Securities,
except as may be required under state securities or blue sky laws.
(d) The Company holds such valid franchises, certificates of
convenience and necessity, licenses, and permits as are necessary with
respect to the maintenance and operation of its property and business
as now conducted, except that (A) the Company from time to time makes
minor extensions of its system prior to the time a related franchise,
certificate, license, or permit is procured, (B) from time to time
communities already being served by the Company become incorporated and
considerable time may elapse before a franchise is procured, (C)
certain franchises may have expired prior to the renegotiation thereof,
(D) the Company may not have obtained certain permits or variances
relating to the environmental requirements described in any of its Form
10-K Report, its Form 10-Q Reports, and/or its Form 8-K Reports
incorporated by reference in the Registration Statements, (E) certain
minor defects and exceptions may exist which, individually and in the
aggregate, are not deemed material, and (F) the Company does not make
any representation regarding the geographical scope of any franchise,
certificate, license, or permit that is not specific as to its
geographical scope.
(e) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Arizona,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
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(f) Except for property specifically excepted from the lien of
the Mortgage or released therefrom in accordance with the terms
thereof, the Company has good and marketable title in fee simple,
except for items described in (A), (B), and (C) below, to all of the
real property purported in the Mortgage to be so held, good and valid
leasehold interests in all properties purported in the Mortgage to be
held under lease, and good and valid title to all other properties
described in the Mortgage as subject to the lien thereof (which
property excludes (i) the combined cycle plant referred to in Note 8 of
Notes to Financial Statements in the Company's Form 10-K Report for the
fiscal year ended December 31, 1995 (the "1995 Form 10-K Report")
incorporated by reference in the Registration Statements but includes
the Company's leasehold and related interests in that plant and (ii)
certain leased interests in Unit 2 of the Palo Verde Nuclear Generating
Station referred to in Note 7 of Notes to Financial Statements in the
1995 Form 10-K Report), except that the transmission and distribution
lines of the Company, other than those located on land owned in fee by
the Company, and the property described in Section 15 of Article IV of
the Forty-first Mortgage Supplemental Indenture, have been installed in
public streets or alleys and in highways under ordinances and permits
granted by the various governmental bodies having jurisdiction, or have
been constructed on leaseholds, easements or rights-of-way granted,
with minor exceptions, by the apparent owners of record of the land and
such leases, easements, or rights-of-way are subject to any defects in
or encumbrances on the title of the respective lessors of such leases
or grantors of such easements or rights-of-way; title to the aforesaid
properties is subject only to: (A) the lien of the Mortgage, (B)
Excepted Encumbrances as defined in the Mortgage, and (C) other liens,
encumbrances or defects, none of which, individually or in the
aggregate, materially interfere with the business or operations of the
Company (with respect to leasehold interests on the Navajo Reservation,
this representation is intended and shall be understood to mean only
that the Company is the owner of the rights conferred upon it by the
leases from the Navajo Tribe relating to the sites on which the Navajo
Plant and the Four Corners Plant are located, and that while the
Company is not aware of the assertion of any claim contesting the
interest of the Navajo Tribe in the lands leased, the Company does not
give any representation with respect to the interest of the Navajo
Tribe in the lands leased or with respect to the enforceability of such
leases against the Navajo Tribe); the Mortgage, subject only as above
set forth in this clause, now constitutes, and the Mortgage and the
Mortgage Supplemental Indentures theretofore executed, subject only as
above set forth in this clause, when the latter shall have been duly
recorded and filed, will constitute, together and as a single
instrument, a direct and valid first mortgage lien upon said
properties, which include all of the properties of the Company (other
than the classes or items of property expressly excepted in the
Mortgage); and all properties (other than the classes or items of
property expressly excepted in the Mortgage or expressly released from
the lien thereof) acquired by the Company after the date of this
opinion in each county in the States of Arizona and New Mexico in which
the Mortgage and the Mortgage Supplemental Indentures shall have been
duly recorded and filed (and, as to which properties, with respect to
priority only, any necessary recordation and/or filing has been
accomplished, including therein any necessary descriptions of
after-acquired real property and real property upon which
after-acquired fixtures are affixed) will, upon such acquisition,
become subject to the first mortgage lien thereof, subject, however, to
Excepted Encumbrances and to liens, if any, existing or placed thereon
at the time of the acquisition thereof by the Company and, with respect
to priority only, to liens, if any, existing prior to the time of any
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necessary recordation and/or filing by the Company.
3. Appointment as Distributors; Agreement of Distributors;
Solicitations.
(a) Subject to the terms and conditions stated herein, the
Company hereby appoints each of the Distributors as an agent of the
Company for the purpose of soliciting or receiving offers to purchase
the Securities from the Company by others during any Marketing Time.
For purposes of this Agreement, "Marketing Time" shall mean any time
when no suspension of solicitation of offers to purchase Securities
pursuant to Section 3(b) or Section 4(b) shall be in effect and any
time when either any Distributor shall own any Securities with the
intention of reselling them or the Company has accepted an offer to
purchase Securities but the related settlement has not occurred.
So long as this Agreement shall remain in effect with respect
to any Distributor, the Company shall not, without the consent of any
such Distributor, solicit or accept offers to purchase newly-issued
Securities from the Company otherwise than through one of the
Distributors; provided, however, that, subject to all of the terms and
conditions of this Agreement, the foregoing shall not be construed to
prevent the Company from selling at any time any Registered Securities
in a firm commitment underwriting pursuant to an underwriting agreement
that does not provide for a continuous offering of such Registered
Securities; and provided, further, that the Company reserves the right
from time to time (i) to purchase or sell Securities directly from or
to an investor, and (ii) to accept a specific offer to purchase
newly-issued Securities from the Company solicited by a dealer other
than the Distributors (each an "Other Dealer"), without obtaining the
prior consent of any of Distributors, provided that any Other Dealer
shall agree to be bound by and subject to the terms and conditions of
this Agreement binding on the Distributors (including the commission
schedule set forth on Exhibit B). Each Distributor is authorized to
engage the services of any other broker or dealer in connection with
the offer or sale of Securities purchased by such Distributor as
principal for resale to others and may reallow a portion of the
commission, but such Distributor is not authorized to appoint
sub-agents.
(b) On the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein set
forth, each Distributor agrees, as an agent of the Company, to use
reasonable best efforts when requested by the Company to solicit offers
to purchase the Securities upon the terms and conditions set forth in
the Prospectus, as from time to time amended or supplemented. No
Distributor shall have any responsibility for maintaining records with
respect to the aggregate principal amount of Securities sold, or
otherwise monitoring the availability of Securities for sale under the
Registration Statements. In connection therewith, each Distributor will
use the Prospectus (as amended or supplemented from time to time) in
the form most recently furnished to such Distributor by the Company and
will solicit offers to purchase the Securities in accordance with the
Act, the Rules and Regulations, and the applicable securities laws or
regulations of any other applicable jurisdiction in which such
Distributor solicits offers to purchase any Securities. In placing any
Securities pursuant to an offer accepted by the Company, the
Distributor that solicited or received such offer (the "Presenting
Distributor") may act as agent or
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purchase such Securities from the Company as principal for resale. Upon
acceptance by the Company of an offer by the Presenting Distributor to
purchase Securities as principal, the Presenting Distributor may
complete a Terms Agreement substantially in the form of Exhibit A
hereto (a "Terms Agreement") and transmit the completed Terms Agreement
to the Company by hand or by facsimile or other similar means of
telecommunication. Upon acceptance by the Company of an offer to
purchase Securities, unless the Company and the Presenting Distributor
otherwise agree in writing, any such Terms Agreement or any other
written confirmation or communication transmitted by the Presenting
Distributor to the Company or, in the absence of a Terms Agreement or
other written confirmation or communication from the Presenting
Distributor, the oral agreement with respect to the terms of the
Securities and of their offer and sale evidenced by the offer
communicated by the Presenting Distributor and accepted by the Company,
in each case together with the provisions of this Agreement, shall
constitute an agreement between the Presenting Distributor and the
Company for the sale and purchase of such Securities (whether or not
any Terms Agreement or other written confirmation or communication
shall have been executed by the Company or the Presenting Distributor).
Upon receipt of notice from the Company as contemplated by
Section 4(b) hereof, each Distributor shall suspend its solicitation of
offers to purchase Securities until such time as the Company shall have
furnished it with an amendment or supplement to the Registration
Statements or the Prospectus, as the case may be, contemplated by
Section 4(b) and shall have advised such Distributor that such
solicitation may be resumed.
The Company reserves the right, in its sole discretion, to
suspend solicitation of offers to purchase the Securities commencing at
any time for any period of time or permanently. Upon receipt of at
least one Business Day's prior notice from the Company, the
Distributors will forthwith suspend solicitation of offers to purchase
Securities from the Company until such time as the Company has advised
the Distributors that such solicitation may be resumed. For the purpose
of the foregoing sentence, "Business Day" shall mean any day that is
not a Saturday or Sunday, and that in The City of New York or Phoenix,
Arizona is not a day on which banking institutions generally are
authorized or obligated by law or executive order to close.
The Distributors are authorized to solicit offers to purchase
Securities as described in the Prospectus, as amended or supplemented,
and only in a minimum aggregate amount of $1,000 (or the equivalent
thereof in one or more currencies or currency units other than U.S.
dollars). Each Distributor shall communicate to the Company, orally or
in writing, each reasonable offer to purchase Securities received by it
as agent. The Company shall have the sole right to accept offers to
purchase the Securities and may reject any such offer, in whole or in
part. Each Distributor shall have the right, in its discretion
reasonably exercised, without notice to the Company, to reject any
offer to purchase Securities received by it, in whole or in part, and
any such rejection shall not be deemed a breach of its agreement
contained herein.
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In connection with the solicitation of offers to purchase
Securities, the Distributors are not authorized to provide to any
person any written information relating to the Company other than the
Prospectus and the documents incorporated by reference therein. No
Security which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold
by the Company, until such Security shall have been delivered to the
purchaser thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any
Securities sold by the Company as a result of a solicitation made by,
or offer to purchase received by, a Distributor, acting on an agency
basis, the Company agrees to pay such Distributor a commission in
accordance with the schedule set forth in Exhibit B hereto. The Company
agrees that each Distributor that purchases Securities as principal for
resale shall receive such compensation, in the form of a discount or
otherwise, as shall be agreed to between such Distributor and the
Company at the time the Company accepts an offer to purchase such
Securities, or, if no such compensation is agreed to, a commission in
accordance with Exhibit B hereto. Unless otherwise specified in a Terms
Agreement, a Distributor purchasing Securities may resell such
Securities to other dealers on the terms set forth in, or determined as
described in, the Prospectus (including, if applicable, the Pricing
Supplement).
(d) Administrative procedures respecting the sale of
Securities (the "Procedures") shall be agreed upon from time to time by
the Distributors and the Company. The initial Procedures, which are set
forth in Exhibit C hereto, shall remain in effect until changed by
agreement among the Company and the Distributors. Each Distributor and
the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them herein and in the
Procedures. The Company will furnish to the Trustee a copy of the
Procedures as from time to time in effect.
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the office of the Company, 400 North Fifth
Street, Phoenix, Arizona 85004, not later than 10:00 A.M., Arizona
time, on the date of this Agreement or at such later time as may be
mutually agreed by the Company and the Distributors, which in no event
shall be later than the time at which the Distributors commence
solicitation of purchases of Securities hereunder, such time and date
being herein called the "Closing Date".
4. Covenants of the Company. In connection with each offering
of Securities, the Company covenants and agrees with the Distributors that:
(a) The Company will advise the Distributors promptly of any
proposed amendment or supplementation of the First Registration
Statement, the Second Registration Statement, the Third Registration
Statement, the Fourth Registration Statement or the Prospectus and will
afford the Distributors a reasonable opportunity to comment on any such
proposed amendment or supplement (other than any Pricing Supplement
that relates to Securities not purchased through or by such
Distributors). The Company will also advise the
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Distributors of the institution by the Commission of any stop order
proceedings in respect of the First Registration Statement, the Second
Registration Statement, the Third Registration Statement, the Fourth
Registration Statement, or of any part thereof, and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact, or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend or supplement the First
Registration Statement, the Second Registration Statement, the Third
Registration Statement, the Fourth Registration Statement or the
Prospectus to comply with the Act, the Company promptly will notify
each Distributor to suspend solicitation of offers to purchase the
Securities and, if the Company shall decide to amend or supplement the
Registration Statements or Prospectus, the Company will promptly advise
each Distributor by telephone (with confirmation in writing) and
promptly will prepare and file with the Commission an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance; provided, however, that if during the
period referred to above any Distributor shall own any Securities that
it has purchased from the Company as principal with the intention of
reselling them and the Distributor has held such Securities for fewer
than 90 days or the Company has accepted an offer to purchase
Securities but the related settlement has not occurred, the Company
promptly will prepare and file with the Commission an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance.
(c) As soon as practicable, but not later than 18 months,
after the date of each acceptance by the Company of an offer to
purchase Securities hereunder, the Company will make generally
available to its security holders an earning statement or statements
(which need not be audited) covering a period of at least 12 months
beginning after the effective date of the Fourth Registration Statement
(as defined in Rule 158(c) under the Act), which will satisfy the
provisions of Section 11(a) of the Act and the rules and regulations
thereunder.
(d) The Company will furnish to the Distributors such copies
of the Registration Statements (including one copy of the Fourth
Registration Statement for the Distributors, and for the counsel for
the Distributors, which is signed and includes all exhibits), any
related preliminary prospectus supplements and the Prospectus,
including all amendments or supplements to such documents, as may be
reasonably requested.
(e) The Company will arrange or cooperate in arrangements for
the qualification of the Securities for sale and the determination of
their eligibility for investment under the laws of such jurisdictions
as the Distributors designate and will continue such qualifications in
effect so long as required for the distribution of the Securities,
provided that the Company shall not be required to qualify as a foreign
corporation in any State, to consent to service of process in any
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State other than with respect to claims arising out of the offering or
sale of the Securities, or to meet other requirements deemed by it to
be unduly burdensome.
(f) For a period expiring on the earlier of (i) five years
after the applicable Representation Date and (ii) the last date on
which any Security sold pursuant to this Agreement is outstanding, the
Company will furnish to the Distributors thereunder (i) as soon as
practicable after the end of each fiscal year, a balance sheet and
statements of income and retained earnings of the Company as at the end
of and for such year, all in reasonable detail and certified by
independent public accountants, and (ii) (A) as soon as practicable
after the end of each quarterly fiscal period (except for the last
quarterly fiscal period of each fiscal year), a balance sheet and
statement of income of the Company as at the end of and for such
period, all in reasonable detail and certified by a principal financial
or accounting officer of the Company, (B) as soon as available, a copy
of each report of the Company mailed by the Company to stockholders or
filed with the Commission, and (C) from time to time, such other
information concerning the Company as may reasonably be requested. So
long as the Company has active subsidiaries, such financial statements
will be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated.
(g) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, and will reimburse
the Distributors for any reasonable expenses (including reasonable fees
and disbursements of counsel) incurred by them in connection with the
qualification of the Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as the
Distributors may designate, and for any fees charged by investment
rating agencies for the rating of the Securities.
(h) Between the date of a Terms Agreement and the date of
delivery of Securities with respect thereto, the Company will not,
without the prior written consent of each Distributor which is a party
to such Terms Agreement, offer or sell, or enter into any agreement to
sell, any of its debt securities which are substantially similar to the
Securities other than borrowings under the Company's revolving credit
agreements and lines of credit, the private placement of securities,
and the issuance of commercial paper.
5. Conditions of Obligations. The obligations of each
Distributor, as agent of the Company, under this Agreement at any time to
solicit offers to purchase the Securities and to purchase Securities from the
Company as principal is subject to the accuracy, on the date hereof and on each
Representation Date, of the representations and warranties of the Company
herein, to the accuracy, on each such date, of the statements of the Company's
officers made pursuant to the provisions hereof, to the performance, on or prior
to each such date, by the Company of its obligations hereunder, and to each of
the following additional conditions precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date, shall have been filed with the Commission in
accordance with the Rules and Regulations and no stop order suspending
the effectiveness of the Registration Statements or of any part thereof
shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company or any Distributor,
shall be contemplated by the Commission.
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(b) Neither the Registration Statements nor the Prospectus, as
amended or supplemented as of any Representation Date, shall contain
any untrue statement of fact which, in the opinion of any Distributor,
is material or omits to state a fact which, in the opinion of any
Distributor, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) There shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Company or its
subsidiaries which, in the judgment of the Distributors materially
impairs the investment quality of the Securities, (ii) a suspension or
material limitation in trading in securities generally on the New York
Stock Exchange, (iii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities, (iv) a lowering of the rating of any of the Company's debt
securities or a public announcement that any such debt securities have
been placed on CreditWatch, Watchlist, or under any similar
surveillance or review, in each case with negative implications, by any
recognized rating agency, and (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of
war by Congress or any other substantial national or international
calamity or emergency if, in the judgment of the Distributors the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Securities.
(d) With respect to any Security denominated in a currency
other than the U.S. dollar, more than one currency or a composite
currency or any Security the principal or interest of which is indexed
to such currency, currencies or composite currency, there shall not
have occurred a suspension or material limitation in foreign exchange
trading in such currency, currencies or composite currency by a major
international bank, a general moratorium on commercial banking
activities in the country or countries issuing such currency,
currencies of composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change in
the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the
imposition or proposal of exchange controls by any governmental
authority in the country or countries issuing such currency, currencies
or composite currency;
(e) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributors or the Distributor purchasing
such Securities (the "Purchasing Distributor"), as the case may be,
shall have received an opinion, dated the Closing Date, or such date of
delivery, as the case may be, of Snell & Wilmer L.L.P., counsel for the
Company, to the effect that:
(i) The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Arizona and has full corporate power and authority to
carry on its business as presently conducted; and the Company
is duly qualified as a foreign corporation to do business and
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is in good standing in the State of New Mexico and the State
of California, the only other jurisdictions in which it owns
or leases substantial properties or in which the conduct of
its business requires such qualification;
(ii) The Indenture has been duly authorized,
executed, and delivered, has been duly qualified under the
Trust Indenture Act, and constitutes a valid and binding
instrument enforceable in accordance with its terms except as
the same may be limited by (a) general principles of equity or
by bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other laws or equitable principles relating to
or affecting the enforcement of creditors' rights generally or
the enforcement of the security provided by the Indenture, (b)
the necessity for compliance with the statutory procedural
rights governing the exercise of remedies by a secured
creditor, and (c) the qualification that certain waivers,
procedures, remedies, and other provisions of the Securities
and the Indenture may be unenforceable under or limited by the
law of the State of Arizona; however, such law does not in
such counsel's opinion substantially prevent the practical
realization of the benefits intended by such documents;
(iii) Any series of Securities established on or
prior to the date of such opinion in conformity with the
Indenture, and, when the terms of a particular Security and of
its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity
with the Indenture, and such Security has been duly completed,
authenticated, and issued in accordance with the Indenture and
delivered against payment as contemplated by this Agreement,
such Security will constitute a valid and binding obligation
of the Company entitled to the benefits provided by the
Indenture (except as the same may be limited by (a) general
principles of equity or by bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other laws or
equitable principles relating to or affecting the enforcement
of creditors' rights generally or the enforcement of the
security provided by the Indenture, (b) the necessity for
compliance with the statutory procedural rights governing the
exercise of remedies by a secured creditor, and (c) the
qualification that certain waivers, procedures, remedies, and
other provisions of such Security and the Indenture may be
unenforceable under or limited by the law of the State of
Arizona; however, such law does not in such counsel's opinion
substantially prevent the practical realization of the
benefits intended by such documents), it being understood that
such counsel may (A) assume that at the time of the issuance,
sale and delivery of each Security the authorization of such
series will not have been modified or rescinded and there will
not have occurred any change in law affecting the validity,
legally binding character or enforceability of such Security,
(B) assume that neither the issuance, sale and delivery of any
Security, nor any of the terms of such Security, nor
compliance by the Company with such terms will violate any
applicable law, any agreement or instrument then binding upon
the Company or any restriction imposed by any
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court or governmental body having jurisdiction over the
Company and (C) state that as of the date of such opinion a
judgement for money in an action based on Securities
denominated in foreign currencies or currency units in a
Federal or State court in the United States ordinarily would
be enforced in the United States only in United States
dollars, and that the date used to determine the rate of
conversion of the foreign currency unit in which a particular
Security is denominated into United States dollars will depend
upon various factors, including which court renders the
judgment;
(iv) The Mortgage has been duly authorized, executed,
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a valid and binding instrument
enforceable in accordance with its terms, except as the same
may be limited by (a) general principles of equity or by
bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other laws or equitable principles relating to
or affecting the enforcement of creditors' rights generally or
the enforcement of the security provided by the Mortgage, (b)
the necessity for compliance with the statutory procedural
rights governing the exercise of remedies by a secured
creditor, and (c) the qualification that certain waivers,
procedures, remedies, and other provisions of the Senior Note
Mortgage Bonds and the Mortgage may be unenforceable under or
limited by the law of the State of Arizona; however, such law
does not in such counsel's opinion substantially prevent the
practical realization of the benefits intended by such
document;
(v) Any series of Senior Note Mortgage Bonds
established on or prior to the date of such opinion in
conformity with the Indenture and the Mortgage, and, when the
terms of a particular Senior Note Mortgage Bond and of its
issuance and sale have been duly authorized and established by
all necessary corporate action in conformity with the
Indenture and the Mortgage, and such Senior Note Mortgage Bond
has been duly completed, authenticated, and issued in
accordance with the Mortgage and delivered to the Trustee as
security for Securities, such Senior Note Mortgage Bond will
constitute a valid and binding obligation of the Company
entitled to the benefits provided by the Mortgage (except as
the same may be limited by (a) general principles of equity or
by bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other laws or equitable principles relating to
or affecting the enforcement of creditors' rights generally or
the enforcement of the security provided by the Mortgage, (b)
the necessity for compliance with the statutory procedural
rights governing the exercise of remedies by a secured
creditor, and (c) the qualification that certain waivers,
procedures, remedies, and other provisions of such Senior Note
Mortgage Bond and the Mortgage may be unenforceable under or
limited by the law of the State of Arizona; however, such law
does not in such counsel's opinion substantially prevent the
practical realization of the benefits intended by such
documents), it being understood that such counsel may (A)
assume that at the time of the issuance, sale and delivery of
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<PAGE>
each Senior Note Mortgage Bond the authorization of such
series will not have been modified or rescinded and there will
not have occurred any change in law affecting the validity,
legally binding character or enforceability of such Senior
Note Mortgage Bond, (B) assume that neither the issuance, sale
and delivery of any Senior Note Mortgage Bond, nor any of the
terms of such Senior Note Mortgage Bond, nor compliance by the
Company with such terms will violate any applicable law, any
agreement or instrument then binding upon the Company or any
restriction imposed by any court or governmental body having
jurisdiction over the Company and (C) state that as of the
date of such opinion a judgement for money in an action based
on Senior Note Mortgage Bonds denominated in foreign
currencies or currency units in a Federal or State court in
the United States ordinarily would be enforced in the United
States only in United States dollars, and that the date used
to determine the rate of conversion of the foreign currency
unit in which a particular Senior Note Mortgage Bond is
denominated into United States dollars will depend upon
various factors, including which court renders the judgment;
(vi) Except for property specifically excepted from
the lien of the Mortgage or released therefrom in accordance
with the terms thereof, the Company has good and marketable
title in fee simple, except for items described in (A), (B),
and (C) below, to all of the real property and fixtures
thereon purported in the Mortgage to be so held and that are
both located in the State of Arizona and described in those
title reports covering at least the Saguaro, Yucca, Cholla,
Ocotillo, West Phoenix, and Palo Verde plant sites that are
listed on an exhibit to such opinion (the "Title Documents")
(in giving such opinion, such counsel may rely solely upon the
Title Documents and may assume the accuracy thereof and of the
real property descriptions contained therein and may state
that no other investigation or inquiry has been made with
respect thereto), and in giving the opinions described below
with respect to any liens, defects, and encumbrances on such
title to such personal property, such counsel may assume that
the Company has good and valid title to all of the personal
property located in the State of Arizona and described in the
Mortgage as subject to the lien thereof (which property shall
not include fixtures), and such counsel may rely solely upon,
and assume the accuracy of, a search of the Uniform Commercial
Code Financing Statements filed in the records of the Arizona
Secretary of State and may assume that there are no liens or
other encumbrances on personal property (as used in the
Arizona Uniform Commercial Code) of the Company located in the
State of Arizona other than liens or other encumbrances that
have been perfected by filing with the Arizona Secretary of
State under Arizona Revised Statutes ("A.R.S.") Section
47-9401.A; such title is subject only to: (A) the lien of the
Mortgage, (B) Excepted Encumbrances as defined in the
Mortgage, and (C) other liens, encumbrances,
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<PAGE>
or defects, none of which, individually or in the aggregate,
in the opinion of such counsel, materially interfere with the
business or operations of the Company (in determining whether
any such other liens, encumbrances, or defects materially
interfere with the business or operations of the Company, such
counsel may rely solely upon a certificate of an officer or
engineer of the Company which shall be attached to such
opinion and such opinion may state that no other investigation
or inquiry with respect thereto has been made); the Mortgage,
subject only as above set forth in this clause, now
constitutes, and the Mortgage and the Mortgage Supplemental
Indentures theretofore executed, subject only as above set
forth in this clause, when the latter shall have been duly
recorded and filed, will constitute, together and as a single
instrument, a direct and valid first mortgage lien upon said
property; and all properties (other than the classes or items
of property expressly excepted in the Mortgage or expressly
released from the lien thereof) acquired by the Company after
the date of such opinion in each county in the State of
Arizona in which the Mortgage and the Mortgage Supplemental
Indentures shall have been duly recorded and filed and, with
respect to priority only, any necessary recordation and/or
filing has been accomplished (including therein any necessary
descriptions of after-acquired real property and real property
upon which after-acquired fixtures are affixed) will, upon
such acquisition, become subject to the first mortgage lien
thereof, subject, however, to Excepted Encumbrances and to
liens, if any, existing or placed thereon at the time of the
acquisition thereof by the Company and, with respect to
priority only, to liens, if any, existing prior to the time of
any necessary recordation and/or filing by the Company;
(vii) The Company is the owner of the rights
conferred upon it by the leases from the Navajo Tribe relating
to the site on which the Navajo Plant is located and while
such counsel is not aware of the assertion of any claim
contesting the title of the Navajo Tribe to the lands leased,
such counsel shall not be required to express any opinion with
respect to the interest of the Navajo Tribe in the lands
leased or with respect to the enforceability of such leases
against the Navajo Tribe;
(viii) With certain exceptions, a public service
corporation is required to obtain certificates of convenience
and necessity from the Arizona Corporation Commission under
A.R.S. Section 40-281.A for construction of its lines, plant,
services, or systems, or any extensions thereof, within the
State of Arizona, and to obtain franchises or similar consents
or permits from counties and incorporated municipalities under
A.R.S. Section 40-283.A for the construction, operation, and
maintenance of transmission lines within the State of Arizona;
to the best of such counsel's knowledge after due inquiry, the
Company holds such valid franchises, certificates of
convenience and necessity, consents, and permits pursuant to
such statutory provisions as are necessary with respect to the
maintenance and operation of its property and business as now
conducted, except that (A) the Company from time to time makes
minor extensions of its system prior to the time a related
franchise, certificate, license, or permit is procured, (B)
from time to time communities already being served
14
<PAGE>
by the Company become incorporated and considerable time may
elapse before a franchise is procured, (C) certain franchises
may have expired prior to the renegotiation thereof, (D)
certain minor defects and exceptions may exist which,
individually and in the aggregate, are not deemed material,
and (E) such counsel need not be required to express any
opinion regarding the geographical scope of any franchise,
certificate, license, or permit that is not specific as to its
geographical scope;
(ix) No consent, approval, authorization, or consent
of any public board or body is required for the consummation
of the transactions contemplated hereby or in any Terms
Agreement, including the issuance and sale of Securities and
Senior Note Mortgage Bonds and the execution and delivery of a
related Supplemental Indenture and Mortgage Supplemental
Indenture, except as may be required under state securities or
blue sky laws, as to which laws such counsel shall not be
required to express an opinion, and such other approvals
(specified in such opinion) as have been obtained;
(x) The First Registration Statement, the Second
Registration Statement, the Third Registration Statement and
the Fourth Registration Statement have become effective under
the Act, and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness of the First
Registration Statement, the Second Registration Statement, the
Third Registration Statement or the Fourth Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Act, and each part of the Registration Statements, when such
part became effective, and the Prospectus, as of the Closing
Date, and any amendment or supplement thereto, as of its date,
complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act, and the
published Rules and Regulations; such counsel has no reason to
believe that any part of the Registration Statements, when
such part became effective, or the Prospectus, as of the
Closing Date, or any amendment or supplement thereto, as of
its date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statements
and Prospectus of statutes, legal and governmental proceedings
and contracts, and other documents are accurate and fairly
present the information required to be shown; and to the
actual knowledge of those persons in the lawyer group
described in such opinion, there are no legal or governmental
proceedings required to be described in the Prospectus that
are not described as required, nor any contracts or documents
of a character required to be described in the Registration
Statements or Prospectus or to be filed as exhibits to the
Registration Statements that are not described and filed as
required (it being understood that such counsel need express
no opinion as to the financial statements or other financial
data contained in the Registration Statements or the
Prospectus); and
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<PAGE>
(xi) This Agreement has been duly authorized,
executed, and delivered by the Company.
In giving such opinion, (a) Snell & Wilmer L.L.P. may rely
solely upon certificates of the Company as to any factual matters upon
which any such opinions are based and may rely upon the opinion of
Keleher & McLeod, P.A., referred to below, as to all matters governed
by the laws of the State of New Mexico, but the opinion of Snell &
Wilmer L.L.P. shall state that, though they are members of the Arizona
Bar and do not hold themselves out as experts on the laws of the State
of New Mexico, they have made a study of the laws of such State insofar
as such laws are involved in the conclusions stated in their opinion,
and from such study it is their opinion that such laws support such
conclusions and that, in their opinion, the Distributors and they are
justified to such extent in relying upon the opinion of Keleher &
McLeod, P.A.; (b) Snell & Wilmer L.L.P. may rely on the opinion
delivered pursuant to Section 5(g) as to all matters governed by the
laws of the State of New York; and (c) the lawyer group referred to in
such opinion will mean those lawyers in the offices of Snell & Wilmer
L.L.P. who (i) have billed any time on the particular transaction to
which such opinion relates or (ii) have billed more than ten hours to
any Company matter in the twelve-month period preceding the date on
which the list of such lawyers was compiled for purposes of inquiry
pursuant to such opinion.
(f) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributors or the Purchasing
Distributor, as the case may be, shall have received an opinion, dated
the Closing, or such date of delivery, as the case may be, of Keleher &
McLeod, P.A., New Mexico counsel for the Company, to the effect that:
(i) The Company is duly qualified as a foreign
corporation to do business and is in good standing in the
State of New Mexico and has full corporate power and authority
to engage in the State of New Mexico in the business now
conducted by it therein; and
(ii) The activities of the Company in the State of
New Mexico to date do not constitute it a "public utility" as
that term is defined in the relevant laws of the State of New
Mexico, and accordingly, no public utility franchises or
certificates of convenience and necessity are necessary under
New Mexico law with respect to the maintenance and operation
of the Company's property and business as now conducted in the
State of New Mexico and no approval, authorization, or consent
of the New Mexico Public Utility Commission or any other
public board or body of the State of New Mexico is required
for the issuance and sale of the Securities or the Senior Note
Mortgage Bonds on the terms and conditions herein and in the
Prospectus set forth or contemplated or for the execution of
the Supplemental Indenture relating to the Securities or the
Mortgage Supplemental Indenture relating to the Senior Note
Mortgage Bonds, except as may be required under New Mexico
state securities or blue
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<PAGE>
sky laws, as to which laws such counsel shall not be required
to express an opinion.
(iii) Assuming that the Company has good and valid
title to all of the personal property located in the State of
New Mexico and described in the Mortgage as subject to the
lien thereof (which property shall not include fixtures)
("Personal Property"), in giving the opinions described below
with respect to any liens, defects and encumbrances on such
title to such Personal Property, such counsel may rely solely
upon, and assume the accuracy of, a search of the Uniform
Commercial Code Financing Statements filed in the records of
the New Mexico Secretary of State and may assume that there
are no liens or other encumbrances on personal property (as
used in the New Mexico Uniform Commercial Code) of the Company
located in the State of New Mexico other than liens or other
encumbrances that have been perfected by filing with the New
Mexico Secretary of State under Section 55-9-401, New Mexico
Statutes Annotated 1978; such title to such Personal Property
is subject only to: (A) the lien of the Mortgage, (B) Excepted
Encumbrances as defined in the Mortgage, and (C) other liens,
encumbrances, or defects, none of which, individually or in
the aggregate, in the opinion of such counsel, materially
interfere with the business or operations of the Company (in
determining whether any such other liens, encumbrances, or
defects materially interfere with the business or operations
of the Company, such counsel may rely solely upon a
certificate of an officer or engineer of the Company which
shall be attached to such opinion and such opinion may state
that no other investigation or inquiry with respect thereto
has been made); the Mortgage, subject only as above set forth
in this clause, now constitutes, and the Mortgage and the
Mortgage Supplemental Indentures theretofore executed, subject
only as above set forth in this clause, when the latter shall
have been duly recorded and filed, will constitute, together
and as a single instrument, a direct and valid first mortgage
lien upon such Personal Property; and all properties (other
than the classes or items of property expressly excepted in
the Mortgage or expressly released from the lien thereof)
acquired by the Company after the date of this opinion in each
county in the State of New Mexico in which the Mortgage and
the Mortgage Supplemental Indentures shall have been duly
recorded and filed and, with respect to priority only, any
necessary recordation and/or filing has been accomplished
(including therein any necessary descriptions of
after-acquired real property and real property upon which
after-acquired fixtures are affixed) will, upon such
acquisition, become subject to the first mortgage lien
thereof, subject, however, to Excepted Encumbrances and to
liens, if any, existing or placed thereon at the time of the
acquisition thereof by the Company and, with respect to
priority only, to liens, if any, existing prior to the time of
any necessary recordation and/or filing by the Company;
17
<PAGE>
(iv) The Company is the owner of the rights conferred
upon it by the leases from the Navajo Tribe relating to the
site on which the Four Corners plant is located and while such
counsel is not aware of the assertion of any claim contesting
the interest of the Navajo Tribe in the lands leased, such
counsel shall not be required to express any opinion with
respect to the interest of the Navajo Tribe in the lands
leased or with respect to the enforceability of such leases
against the Navajo Tribe.
In giving such opinion, Keleher & McLeod, P.A. may rely solely upon
certificates of the Company as to any factual matters upon which any
such opinions are based.
(g) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributors or the Purchasing
Distributor, as the case may be, shall have received an opinion, dated
the Closing Date, or such date of delivery, as the case may be, from
counsel for the Distributors or the Purchasing Distributor, as the case
may be, dated the Closing Date or such date of delivery, as the case
may be, with respect to the incorporation of the Company, the validity
of the Securities, the Senior Note Mortgage Bonds, the Registration
Statements, the Prospectus, and other related matters as may reasonably
be required, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters. In rendering such opinion, such counsel may rely as to
the incorporation of the Company and all other matters governed by the
laws of the States of Arizona and New Mexico upon the opinions of Snell
& Wilmer L.L.P. and Keleher & McLeod, P.A., referred to above.
(h) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributors or the Purchasing
Distributor, as the case may be, shall have received a certificate of
the President or any Vice President and a principal financial or
accounting officer of the Company, dated the Closing Date or such date
of delivery, as the case may be, in which such officers, to the best of
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are
true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date, that no stop order suspending the
effectiveness of the First Registration Statement, the Second
Registration Statement, the Third Registration Statement or the Fourth
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
that, subsequent to the date of the most recent financial statements in
the Prospectus, there has been no material adverse change in the
financial position or results of operations of the Company and its
subsidiaries except as set forth or contemplated in the Prospectus or
as described in such certificate.
(i) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributors or the Purchasing
Distributor, as the case may be, shall have received a letter of
Deloitte & Touche LLP, dated the Closing Date or such date of delivery,
as the case may be, confirming that they are independent certified
public accountants within the meaning of the Act and the applicable
18
<PAGE>
published Rules and Regulations thereunder, and stating in effect that
(i) in their opinion the financial statements and schedules of the
Company audited by them and incorporated by reference in the
Registration Statements comply as to form in all material respects with
the applicable accounting requirements of the Securities Exchange Act
of 1934 (the "1934 Act") and the published Rules and Regulations
thereunder and (ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of officials of
the Company responsible for financial and accounting matters, and other
specified procedures, nothing came to their attention that caused them
to believe that (A) the unaudited financial statements incorporated by
reference, if any, in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the published Rules and Regulations
thereunder or are not stated on a basis substantially consistent with
that of the audited financial statements incorporated by reference in
the Registration Statements, (B) at the date of the most recent
available unaudited financial statements and at a specified date not
more than five days prior to the date of this Agreement, there was any
increase in the amounts of common stock, redeemable preferred stock, or
non-redeemable preferred stock of the Company or any increase,
exceeding $10,000,000, in long-term debt of the Company or, at the date
of the most recent available unaudited financial statements there was
any decrease in net assets as compared with amounts shown in the most
recent financial statements incorporated by reference in the
Registration Statements, or (C) for the twelve-month period ended at
the date of the most recent available unaudited financial statements
there were any decreases, exceeding 3%, as compared with the
twelve-month period ended at the date of the most recent financial
statements incorporated by reference in the Registration Statements, in
the amounts of total revenues or net income, except in all cases for
increases or decreases which result from the declaration or payment of
dividends, or which the Registration Statements (including any material
incorporated by reference therein) disclose have occurred or may occur,
or which are described in such letter.
The Company will furnish the Distributors with such conformed
copies of such opinions, certificates, letters, and documents as may be
reasonably requested.
6. Additional Covenants of the Company. The Company agrees
that:
(a) Each acceptance by the Company of an offer for the
purchase of Securities shall be deemed to be an affirmation that its
representations and warranties contained in this Agreement are true and
correct at the time of such acceptance and a covenant that such
representations and warranties will be true and correct at the time of
delivery to the purchaser of the Securities as though made at and as of
each such time, it being understood that such representations and
warranties shall relate to the Registration Statements and the
Prospectus as amended or supplemented at each such time. Each such
acceptance by the Company of an offer to purchase Securities shall be
deemed to constitute an additional representation, warranty and
agreement by the Company that, as of the date of delivery of such
Securities to the purchaser thereof, after giving effect to the
issuance of such Securities, of any other Securities to be issued on or
prior to such delivery date and of any other Registered Securities to
be issued and sold by the Company on or prior to such delivery date,
the aggregate amount of Registered Securities (including
19
<PAGE>
any Securities) which have been issued and sold by the Company will not
exceed the amount of Registered Securities registered pursuant to the
Registration Statements.
(b) Each time that the Registration Statements or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement, an amendment or supplement which relates exclusively to an
offering of securities other than the Securities, or an amendment or
supplement that occurs through the filing an incorporated document
(other than a Form 10-K or Form 10-Q) with the Commission), the Company
shall, (A) concurrently with such amendment or supplement, if such
amendment or supplement shall occur at a Marketing Time, or (B)
immediately at the next Marketing Time if such amendment or supplement
shall not occur at a Marketing Time, furnish the Distributors with a
certificate, dated the date of delivery thereof, of the President or
any Vice President and a principal financial or accounting officer of
the Company, in form satisfactory to the Distributors, to the effect
that the statements contained in the certificate covering the matters
set forth in Section 5(h) hereof which was last furnished to the
Distributors pursuant to this Section 6(b) are true and correct at the
time of such amendment or supplement, as though made at and as of such
time or, in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in Section 5(h).
(c) At each Representation Date referred to in Section 6(b),
the Company shall, (A) concurrently if such Representation Date shall
occur at a Marketing Time, or (B) immediately at the next Marketing
Time if such Representation Date shall not occur at a Marketing Time,
furnish the Distributors with a written opinion or opinions, dated the
date of such Representation Date, of counsel for the Company, in form
satisfactory to the Distributors, to the effect set forth in Sections
5(e) and 5(f) hereof; provided, however, that to the extent appropriate
such opinion or opinions may reconfirm matters set forth in a prior
opinion delivered at the Closing Date or under this Section 6(c);
provided further, however, that any opinion or opinions furnished under
this Section 6(c) shall relate to the Registration Statements and the
Prospectus as amended or supplemented at such Representation Date.
(d) At each Representation Date referred to in Section 6(b) on
which the Registration Statements or the Prospectus shall be amended or
supplemented to include additional financial information, the Company
shall cause Deloitte & Touche LLP, (A) concurrently if such
Representation Date shall occur at a Marketing Time, or (B) immediately
at the next Marketing Time if such Representation Date shall not occur
at a Marketing Time, to furnish the Distributors with a letter,
addressed jointly to the Company and the Distributors and dated the
date of such Representation Date, to the effect set forth in Section
5(i) hereof; provided, however, that to the extent appropriate such
letter may reconfirm matters set forth in a prior letter delivered at
the Closing Date or pursuant to this Section 6(d); provided further,
however, that any letter furnished under this Section 6(d) shall relate
to the Registration Statements and the Prospectus as amended or
supplemented at such Representation Date, with such changes as may be
necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company.
20
<PAGE>
(e) On each date for the delivery of Securities to the
purchaser thereof, the Company shall, if requested by the Distributor
that solicited or received the offer to purchase any Securities being
delivered on such settlement date, furnish such Distributor with a
written opinion or opinions, dated the date of delivery thereof, of
counsel for the Company, to the effect set forth in Sections 5(e) and
5(f) hereof; provided, however, that in lieu of each opinion, such
counsel may furnish the Distributor with a letter to the effect that
the Distributor may rely on such prior opinion to the same extent as
though it was dated such delivery date (except that statements in such
prior opinion shall be deemed to relate to the Registration Statements
and Prospectus as amended or supplemented to the time of delivery of
such letter authorizing reliance).
(f) The Company agrees that any obligation of a person who has
agreed to purchase Securities, to make payment for, and take delivery
of such Securities shall be subject to (i) the accuracy, on the related
settlement date fixed pursuant to the Procedures, of the Company's
representation and warranty deemed to be made to the Distributors
pursuant to the last sentence of subsection (a) of this Section 6, and
(ii) the satisfaction, on such settlement date, of each of the
conditions set forth in Sections 5(a), (b) and (c), it being understood
that under no circumstance shall any Distributor have any duty or
obligation to exercise the judgment permitted under Section 5(b) or (c)
on behalf of any such person.
7. Indemnification.
(a) The Company will indemnify and hold harmless each
Distributor and each person, if any, who controls such Distributor
within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any part of
the Registration Statements relating to the Securities, when such part
became effective, any preliminary prospectus or preliminary prospectus
supplement, the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will
reimburse each Distributor and each such controlling person for any
legal or other expenses reasonably incurred by such Distributor or such
controlling person in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage, or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any of such documents in reliance upon and in
conformity with written information furnished to the Company by any
Distributor specifically for use therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
21
<PAGE>
(b) Each Distributor will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who
have signed the Registration Statements, and each person, if any, who
controls the Company within the meaning of the Act, against any losses,
claims, damages, or liabilities to which the Company or any such
director, officer, or controlling person may become subject, under the
Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in any part of the Registration Statements relating to
the Securities, when such part became effective, any preliminary
prospectus or preliminary prospectus supplement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Distributor specifically for use therein; and will reimburse any legal
or other expenses reasonably incurred by the Company or any such
director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or
action. This indemnity agreement will be in addition to any liability
which such Distributor may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability that it may
have to any indemnified party otherwise than under this Section. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, without the
consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. An indemnifying party shall not
be liable for any settlement of a claim or action effected without its
written consent, which shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party for
any loss, claim, damage, liability, or action described in subsection
(a) or (b) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above on the following basis: (1) if such loss, claim, damage,
liability, or action arises under subsection (a) above, then (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Distributor[s] on the
other from the offering of the Securities or (ii) if the allocation
provided
22
<PAGE>
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Distributors on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations; and (2) if such loss, claim, damage, liability, or
action arises under subsection (b) above, then in such proportion as is
appropriate to reflect the relative fault of the Company on the one
hand and the Distributors on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations.
For the purposes of clause (1) above, the relative benefits received by
the Company on the one hand and the Distributors on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Distributors. For the purposes of clauses (1) and (2) above, the
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Distributors and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the
subject of this subsection (d). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Distributors' obligations in
this subsection (d) to contribute are several in proportion to their
respective obligations and not joint.
8. Status of Each Distributor. In soliciting offers to
purchase the Securities from the Company pursuant to this Agreement and in
assuming its other obligations hereunder (other than any obligation to purchase
Securities pursuant to Section 3 hereof), each Distributor is acting
individually and not jointly and is acting solely as agent for the Company and
not as principal. In connection with the placement of any Securities by a
Distributor, acting as agent, (a) each Distributor will make reasonable efforts
to assist the Company in obtaining performance by each purchaser whose offer to
purchase Securities from the Company has been solicited by such Distributor and
accepted by the Company, but such Distributor shall have no liability to the
Company in the event any such purchase is not consummated for any reason; and
(b) if the Company shall default on its obligations to deliver Securities to a
purchaser whose offer it has accepted, the Company (i) shall hold the
Distributors harmless against any loss, claim or damage arising from or as a
result of such default by the Company, and (ii) in particular, shall pay to the
Distributors any commission to which they would be entitled in connection with
such sale.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties, and other
statements of the Company or its officers and of the Distributors set forth in
or made pursuant to this Agreement will remain in full force and effect
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of the Distributors or the Company or any of its officers or
directors or any controlling person, and will
23
<PAGE>
survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 10 or for any other reason or if for any reason
the sale of Securities described in a confirmation or Terms Agreement referred
to Section 3 by the Company to a Distributor is not consummated, the Company
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4(g) and the obligations of the Company under Sections 4(c)
and 4(f) and the respective obligations of the Company and the Distributors
pursuant to Section 7 shall remain in effect. In addition, if any such
termination of this Agreement shall occur either (i) at a time when any
Distributor shall own any Securities that it has purchased from the Company as
principal with the intention of reselling them and the Distributor has held such
Securities for fewer than 90 days or (ii) after the Company has accepted an
offer to purchase Securities but the related settlement has not occurred, the
obligations of the Company under the proviso in Section 4(b), under Sections
4(a), 4(d), 4(e) and 4(h) and, in the case of a termination occurring as
described in (ii) above, under Sections 3(c), 6(a), 6(e) and 6(f) and under the
last sentence of Section 8, shall also remain in effect.
10. Termination. This Agreement may be terminated for any
reason at any time by the Company as to any Distributor or, in the case of any
Distributor, by such Distributor insofar as this Agreement relates to such
Distributor, upon the giving of one day's written notice of such termination to
the other parties hereto; provided, however, that this Agreement may not be
terminated with respect to a Distributor by the giving of such notice following
receipt by the Company of a confirmation or Terms Agreement referred to in
Section 3 relating to the purchase of Securities by such Distributor and prior
to delivery of the Securities described in such confirmation or Terms Agreement,
unless the sale and purchase of Securities contemplated thereby is rejected by
the Company in accordance with Section 3. Any settlement with respect to
Securities placed by a Distributor on an agency basis occurring after
termination of this Agreement shall be made in accordance with the Procedures
and each Distributor agrees, if requested by the Company, to take the steps
therein provided to be taken by such Distributor in connection with such
settlement.
11. Sales of Securities Denominated in a Currency other than
U.S. Dollars or of Indexed Securities. If at any time the Company and any of the
Distributors shall determine to issue and sell Securities denominated in a
currency other than U.S. dollars, which other currency may include a currency
unit, or with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, the Company and any such
Distributor may execute and deliver a supplement to this Agreement for the
purpose of making any appropriate additions to and modifications of the terms of
this Agreement (and the Procedures) applicable to such Securities and the offer
and sale thereof. The Distributors are authorized to solicit offers to purchase
Securities with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, and the Company shall agree
to any sales of such Securities (whether offered on an agency or principal
basis), only in a minimum aggregate amount of $2,500,000. The Company will not
issue Securities denominated in Yen otherwise than in compliance with applicable
Japanese laws, regulations and policies. In particular, the Company or its
designated agent shall submit such reports or information as may be required
from time to time by applicable law, regulations and guidelines promulgated by
Japanese governmental and regulatory authorities in the case of the issue and
purchase of the Securities and the Company shall ensure that each such Security
shall have a minimum denomination of
24
<PAGE>
(Y)1,000,000 and a minimum maturity of one year or such other minimum
denomination and maturity as may be allowed from time to time by Japanese
governmental and regulatory authorities.
12. Notices. All communications hereunder relating to any
offering of Securities will be in writing, and, if sent to the Distributors, may
be mailed, delivered, or telecopied and confirmed at their addresses furnished
to the Company in writing for the purpose of communications. All communications
hereunder to the Company shall be mailed to the Company, Attention: Treasurer,
at P.O. Box 53999, Phoenix, Arizona 85072-3999, or delivered, or telecopied and
confirmed to the Company at 400 North Fifth Street, Phoenix, Arizona 85004.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and the Distributors as are named in any
Terms Agreement and their respective successors and the officers and directors
and controlling persons referred to in Section 7 and, to the extent provided in
Section 6(f), any person who has agreed to purchase Securities from the Company,
and no other person will have any right or obligation hereunder.
14. Governing Laws; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
This Agreement and any Terms Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute a single instrument.
25
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
Very truly yours,
ARIZONA PUBLIC SERVICE COMPANY
By: Nancy E. Newquist
-----------------------------
Treasurer
Confirmed and Accepted, as of the
date first above written:
CS FIRST BOSTON CORPORATION
By:Thomas R. Osborne
----------------------------
Vice President
SALOMON BROTHERS INC
By:Arthur H. Tildesley, Jr.
----------------------------
Director
26
<PAGE>
Exhibit A
Arizona Public Service Company
("Company")
Medium Term Notes, Series _____
Due Nine Months or More from Date of Issue
TERMS AGREEMENT
---------------
___________, 199__
Arizona Public Service Company
400 North 5th Street
Phoenix, AZ 85004
Attention: Treasurer
Ladies and Gentlemen:
We offer to purchase, on and subject to the terms and
conditions of the Distribution Agreement filed as an exhibit to the Company's
registration statement on Form S-3 (No. 333-15379) ("Distribution Agreement"),
the following Securities ("Notes") on the following terms:
Title:
Currency or Currency Units:
Stated Maturity:
Principal Amount:
Public Offering Price: [___%, subject to change by the
undersigned -- The Distributor
proposes to reoffer the above Notes
from time to time at market prices
prevailing at the time of sale, at
prices related to such prevailing
market prices or at negotiated
prices.]
Original Issue Discount Security: Yes ____ No ____
Denominations:
Purchase Price (to be paid in immediately available funds):
___% [, plus accrued interest, if any, from the Trade Date to
the Settlement Date]
Underwriting Discount or Commission received from the Company
(%):
Proceeds to Company (If different from Public Offering Price)
(%):
<PAGE>
In the case of Fixed Rate Notes, the interest rate and, if
different from the dates set forth in the Prospectus
Supplement, the Interest Payment Date or Dates and
corresponding Regular Record Date or Dates:
In the case of Floating Rate Notes, the interest rate formula,
Initial Interest Rate, the Index Maturity, the Spread or
Spread Multiplier (if any), the maximum or minimum Interest
rate limitations (if any), the Interest Reset Dates, the
Interest Determination Dates, the Calculation Agent, the
Calculation Dates, the Interest Payment Dates and the Regular
Record Dates, in each case to the extent applicable:
Optional Redemption (option of the Company):
Redemption Date(s):
Redemption Prices(s)(%):
Notice Period:
Optional Redemption (option of the Holder):
Redemption Date(s):
Redemption Price(s)(%):
Notice Period:
Sinking Fund:
Other Terms:
Trade Date:
Settlement Date (Issue Date):
-2-
<PAGE>
* * * * *
Details for Settlement
- ----------------------
(Additional Purchase Information -- to be completed by
Distributor, if desired, to the extent available):
Exact name in which the Note or Notes are to be
registered ("registered owner"):
Exact address of registered owner and, if different,
the address for delivery of notices and payment of
principal and any premium and interest:
Taxpayer identification number of registered owner:
Principal amount of each Note in authorized
denominations to be delivered to registered owner:
Exchange rate applicable to purchase Foreign Currency
Notes to be paid for in U.S. dollars:
* * * * *
Our agreement to purchase the Notes hereunder is subject to
the conditions set forth in the Distribution Agreement, including the conditions
set forth in paragraphs (d), (e), (f), (g), (h), and (i) of Section 5 thereof.
If for any reason the purchase by the undersigned of the Notes is not
consummated other than because of a default by the undersigned or a failure to
satisfy a condition set forth in clause (ii), (iii) or (v) of Section 5(c) of
the Distribution Agreement, the Company shall reimburse the undersigned for all
out-of-pocket expenses reasonably incurred by the undersigned in connection with
the offering of the Notes and not otherwise required to be reimbursed pursuant
to Section 4 of the Distribution Agreement.
-3-
<PAGE>
Unless the undersigned has received notification from the
Company within [one Business Day (as defined in the Distribution Agreement)]
that the Company does not agree to the terms set forth herein, this Terms
Agreement shall constitute an agreement between the Company and the undersigned
for the sale and purchase of the Notes upon the terms set forth herein and in
the Distribution Agreement.
Very truly yours,
[NAME OF DISTRIBUTOR]
By ____________________________________
Accepted and agreed to
as of the date set forth above.
ARIZONA PUBLIC SERVICE COMPANY
By _________________________________
<PAGE>
EXHIBIT B
COMMISSION SCHEDULE TO FOLLOW
<PAGE>
EXHIBIT C
ADMINISTRATIVE PROCEDURES
-------------------------
The medium-term notes due nine months or more from their issue
date (the "Notes"), are to be offered on a continuing basis by Arizona Public
Service Company (the "Company"). CS First Boston Corporation and Salomon
Brothers Inc (individually, a "Distributor" and collectively, the
"Distributors"), have each agreed to use reasonable efforts to solicit offers to
purchase the Notes. Each Distributor may, but will not be obligated to, purchase
Notes as principal for its own account. The Notes are being sold pursuant to a
Distribution Agreement, dated November 19, 1996 (the "Distribution Agreement"),
between the Company and the Distributors, and will be issued pursuant to an
Indenture, dated as of November 15, 1996 (the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Trustee"). Subject to Article 14 of
the Indenture, until the Release Date, the Notes will be secured by one or more
series of the Company's first mortgage bonds issued and delivered by the Company
to the Trustee for the Notes. On the Release Date, the Notes will cease to be
secured by the Company's first mortgage bonds, will become unsecured general
obligations of the Company, and will rank on a parity with other unsecured
senior indebtedness of the Company. For a description of the terms of the Notes
and the offering and sale thereof, see the sections entitled "Description of
Senior Notes", "Special Provisions Relating to Foreign Currency Notes", "Plan of
Distribution of Senior Notes" and "Glossary" in the Prospectus Supplement
relating to the Notes, dated ________, 19__, attached hereto and hereinafter
referred to as the "Prospectus Supplement", and the sections entitled
"Description of Senior Notes" and "Plan of Distribution" in the Prospectus
relating to the Notes, dated November 18, 1996, attached hereto and hereinafter
referred to as the "Prospectus." Defined terms used herein but not defined
herein shall have the meanings assigned to them in the Distribution Agreement,
the Prospectus or the Prospectus Supplement.
The Notes will be represented either by Global Notes delivered
to The Depository Trust Company ("DTC") or its nominee and recorded in the
book-entry system maintained by DTC or such nominee ("Book-Entry Notes") or by
certificates issued in definitive form delivered to the Holders thereof or
Persons designated by such Holders ("Certificated Notes"). Notes for which
interest is calculated on the basis of a fixed interest rate are referred to
herein as "Fixed Rate Notes". Notes for which interest is calculated at a rate
or rates determined by reference to an interest rate formula are referred to
herein as "Floating Rate Notes".
Notes may be issued as Indexed Notes, with the principal
amount payable at Maturity, the amount of interest payable on an Interest
Payment Date, or both, to be determined by reference to currencies, currency
units, commodity prices, financial or non-financial indices or other factors, as
indicated in the applicable Pricing Supplement. Holders of Indexed Notes may
receive a principal amount at Maturity that is greater than or less than the
face amount of such Notes depending upon the fluctuation of the relative value,
rate or price of the specified index. Specific information pertaining to the
method for determining the principal amount payable at Maturity, a historical
comparison of the relative value, rate or price of the specified index and
<PAGE>
the face amount of the Indexed Note and any additional tax considerations will
be described in the applicable Pricing Supplement.
Notes which are issued at a price lower than the principal
amount thereof and which provide that upon redemption or acceleration of the
Maturity thereof an amount less than the principal thereof shall become due and
payable are referred to herein as "Original Issue Discount Notes". For special
provisions relating to Original Issue Discount Notes and other Notes issued at a
discount for tax purposes, see the section entitled "United States Taxation --
Original Issue Discount" in the Prospectus.
Unless otherwise indicated in the applicable Pricing
Supplement, the Notes will be denominated in U.S. dollars and payments of
principal of and any premium and interest on the Notes will be made in U.S.
dollars in the manner indicated in the Prospectus and the Prospectus Supplement.
Notes denominated in one or more currencies or currency units other than U.S.
dollars are referred to herein as "Foreign Currency Notes". For special
provisions relating to Foreign Currency Notes, see the sections entitled
"Special Provisions Relating to Foreign Currency Notes" in the Prospectus
Supplement . Specific information concerning the foreign currency or currency
unit in which a particular Foreign Currency Note is denominated, including
historical exchange rates and a description of the currency and any exchange
controls, shall be contained in a Pricing Supplement to the Prospectus
Supplement reflecting the terms of such Note.
Notes which provide that amounts payable by the Company in
respect of principal of or any premium or interest on the Notes shall be
determined by reference to the value, rate or price of one or more specified
indices, are referred to herein as "Indexed Notes". Specific information
pertaining to the method for determining the principal amounts payable, a
historical comparison of the value, rate or price of the specified index,
indices and the face amount of the Indexed Note and certain additional tax
considerations will be described in the applicable Pricing Supplement.
Administrative procedures and specific terms of the offering
are explained below. Part I indicates procedures applicable to all Notes; Part
II indicates specific procedures for Certificated Notes; and Part III indicates
specific procedures for Book-Entry Notes. Administrative and record-keeping
responsibilities will be handled for the Company by its Treasury Department. The
Company will advise the Distributors in writing of those persons handling
administrative responsibilities with whom the Distributors are to communicate
regarding offers to purchase Notes and the details of their delivery.
PART I: PROCEDURES APPLICABLE TO ALL NOTES
- -------------------------------------------
Issue Date
- ----------
Each Note will be dated the date of its authentication. Each
Note will also bear an original issue date (the "Issue Date") which, with
respect to any such Note (or portion thereof),
C-2
<PAGE>
shall mean the date of its original issuance and shall be specified therein. The
Issue Date will remain the same for all Notes subsequently issued upon transfer,
exchange or substitution of a Note, regardless of their dates of authentication.
Price to Public
- ---------------
Except as otherwise specified in a Pricing Supplement, each
Note will be issued at 100% of principal amount.
Maturities; Minimum Purchase;
- -----------------------------
Each Note will mature on a date, selected by the purchaser and
agreed to by the Company, which will be at least nine months from its Issue
Date. The minimum aggregate amount of Notes which may be offered to any
purchaser will be $100,000.
Interest Payments
- -----------------
Interest on each interest-bearing Note will be calculated and
paid in the manner described in such Note and in the Prospectus Supplement and
the applicable Pricing Supplement. Unless otherwise set forth therein, interest
on Fixed Rate Notes (including interest for partial periods) will be calculated
on the basis of a 360-day year of twelve 30-day months and will not accrue on
the 31st day of any month. Interest on Floating Rate Notes, except as otherwise
set forth therein, will be calculated on the basis of actual days elapsed and a
year of 360 days, except that in the case of a Floating Rate Note for which the
Base Rate is the Treasury Rate, interest will be calculated on the basis of the
actual number of days in the year.
On the fifth Market Day immediately preceding each Interest
Payment Date, the Trustee will furnish the Company with the total amount of
interest payments (whether in U.S. dollars or other currencies or currency
units) to be made on such Interest Payment Date. The Trustee will provide
monthly, to the Company's Treasury Department, a list of the principal and any
premium and interest to be paid on Notes maturing in the next succeeding month.
The Trustee will assume responsibility for withholding taxes on interest paid as
required by law.
Redemption/Repayment
- --------------------
If indicated in the applicable Pricing Supplement, the Notes
of a particular tenor will be subject to redemption in whole or in part (subject
to applicable minimum denominations), at the option of the Company on and after
an initial redemption date as set forth in the applicable Pricing Supplement and
in the applicable Note. The redemption price will be set forth in the applicable
Pricing Supplement and in the applicable Note.
C-3
<PAGE>
If indicated in the applicable Pricing Supplement, the Notes
of a particular tenor will be subject to repayment at the option of the Holders
thereof in accordance with the terms of the Notes on a repayment date as set
forth in the applicable Pricing Supplement and in the applicable Note. The
repayment date or dates and repayment price will be set forth in the applicable
Pricing Supplement and in the applicable Note. The applicable Pricing Supplement
will also indicate whether a Note is subject to an optional extension beyond its
Stated Maturity or whether the term of all or any portion of a Note may be
extended beyond its initial Stated Maturity Date.
Procedures for Establishing the Terms of the Notes
- --------------------------------------------------
The Company and the Distributors will discuss from time to
time the price of and the rates to be borne by the Notes that may be sold as a
result of the solicitation of offers by the Distributors. Once any Distributor
has recorded any indication of interest in Notes upon certain terms, and
communicated with the Company, if the Company plans to accept an offer to
purchase Notes upon such terms, it will prepare a Pricing Supplement to the
Prospectus, as then amended or supplemented, reflecting the terms of such Notes
and, after approval from the Distributors, will arrange to have the Pricing
Supplement filed with, or transmitted by a means reasonably calculated to result
in filing with, the Securities and Exchange Commission (the "Commission")via the
Commission's Edgar System pursuant to Rule 424 under the Securities Act of 1933,
as amended (the "Act").* The Company will supply at least 10 copies of the
Prospectus, as then amended or supplemented, and bearing such Pricing
Supplement, to the Distributor who presented the offer (the "Presenting
Distributor"). No settlements with respect to Notes upon such terms may occur
prior to such transmitting or filing and the Distributors will not, prior to
such transmitting or filing, mail confirmations to customers who have offered to
purchase Notes upon such terms. After such transmitting or filing, sales,
mailing of confirmations and settlements may occur with respect to Notes upon
such terms, subject to the provisions of "Delivery of Prospectus" below.
- --------------------------
* If clause (b)(3) of Rule 424 is applicable, such filing shall be made
no later than the fifth business day following the earlier of the date
of determination of the settlement information described below or the
date such Pricing Supplement is first used. If clause (b)(2) or (b)(5)
of Rule 424 is applicable, such filing shall be made no later than the
second business day following the earlier of the date of determination
of the settlement information or the date such Pricing Supplement is
first used.
C-4
<PAGE>
Pricing Supplements delivered to the Distributors will be
sent:
if sent to CS First Boston Corporation:
CS First Boston Corporation
Five World Trade Center, 7th Floor
New York, New York 10048
Attn: Joan Bryan
Telephone: (212) 322-5105
if sent to Salomon Brothers Inc:
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida, 33637
Attn: Enrique Castro
Telephone: (813) 558-7165
(813) 558-4123
If the Company decides to post rates and a decision has been
reached to change interest rates, the Company will promptly notify each
Distributor. Each Distributor will forthwith suspend solicitation of purchases.
At that time, the Distributors will recommend and the Company will establish
rates to be so "posted." Following establishment of posted rates and prior to
the transmitting or filing described in the preceding paragraph, the
Distributors may only record indications of interest in purchasing Notes at the
posted rates. Once any Distributor has recorded any indication of interest in
Notes at the posted rates and communicated with the Company, if the Company
plans to accept an offer at the posted rate, it will prepare a Pricing
Supplement reflecting such posted rate and, after approval from the
Distributors, will arrange to have 10 copies of the Pricing Supplement, filed
with, or transmitted by means reasonably calculated to result in filing with,
the Commission via the Commission's Edgar System pursuant to Rule 424(b) under
the Act and will supply at least 10 copies of the Prospectus, as then amended or
supplemented, and bearing such Pricing Supplement, to the Presenting
Distributor. No settlements at the posted rates may occur prior to such
transmitting or filing and the Distributors will not, prior to such transmitting
or filing, mail confirmations to customers who have offered to purchase Notes at
the posted rates. After such transmitting or filing, sales, mailing of
confirmations and settlements may resume, subject to the provisions of "Delivery
of Prospectus" below.
Outdated Pricing Supplements, and copies of the Prospectus to
which they are attached (other than those retained for files), will be
destroyed.
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Suspension of Solicitation: Amendment or Supplement
- ----------------------------------------------------
As provided in the Distribution Agreement, the Company may
instruct the Distributors to suspend solicitation of offers to purchase at any
time, and upon receipt of at least one Market Day's prior notice from the
Company, the Distributors will each forthwith suspend solicitation until such
time as the Company has advised them that solicitation of offers to purchase may
be resumed.
If the Distributors receive the notice from the Company
contemplated by Section 3(b) or 4(b) of the Distribution Agreement, they will
promptly suspend solicitation and will only resume solicitation as provided in
the Distribution Agreement. If the Company is required, pursuant to Section 4(b)
of the Distribution Agreement, to prepare an amendment or supplement, it will
promptly furnish each Distributor with the proposed amendment or supplement; if
the Company decides to amend or supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly advise each Distributor and
will furnish each Distributor with the proposed amendment or supplement in
accordance with the terms of the Distribution Agreement. The Company will
promptly file such amendment or supplement with the Commission, provide the
Distributors with copies of any such amendment or supplement, confirm to the
Distributors that such amendment or supplement has been filed with the
Commission and advise the Distributors that solicitation may be resumed.
Any such suspension shall not affect the Company's obligations
under the Distribution Agreement; and in the event that at the time the Company
suspends solicitation of offers to purchase there shall be any offers already
accepted by the Company outstanding for settlement, the Company will have the
sole responsibility for fulfilling such obligations. The Company will in
addition promptly advise the Distributors and the Trustee if such offers are not
to be settled and if copies of the Prospectus as in effect at the time of the
suspension may not be delivered in connection with the settlement of such
offers.
Acceptance of Offers
- --------------------
Each Distributor will promptly advise the Company, at its
option orally or in writing, of each reasonable offer to purchase Notes received
by it, other than those rejected by such Distributor. Each Distributor may, in
its discretion reasonably exercised, without notice to the Company, reject any
offer received by it, in whole or in part. The Company will have the sole right
to accept offers to purchase Notes and may reject any such offer, in whole or in
part. If the Company accepts or rejects an offer, in whole or in part, the
Company will promptly so notify the Presenting Distributor.
Confirmation
- ------------
For each accepted offer, the Presenting Distributor will issue
a confirmation, in writing, to the purchaser, with a copy to the Company's
Treasury Department, setting forth the
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Purchase Information (as defined under II below with respect to Certificated
Notes and III below with respect to Book-Entry Notes) and delivery and payment
instructions; provided, however, that, in the case of the confirmation issued to
the purchaser, no confirmation shall be delivered to the purchaser prior to the
delivery of the Prospectus referred to below.
Determination of Settlement Date
- --------------------------------
The receipt of immediately available funds by the Company in
payment for a Note and (i) in the case of Certificated Notes, the authentication
and issuance of such Note and (ii) in the case of Book-Entry Notes, entry by the
Presenting Distributor of an SDFS deliver order through DTC's Participant
Terminal System to credit such Note to the account of a Participant purchasing,
or acting for the purchase of, such Note, shall, with respect to such Note,
constitute "settlement." All offers accepted by the Company will be settled on
the third Market Day next succeeding the date of acceptance, unless otherwise
agreed by the purchaser and the Company. The settlement date shall be specified
upon receipt of an offer to purchase. Prior to 3:00 p.m., New York City time, on
the Market Day prior to the settlement date, the Company will instruct the
Trustee to authenticate and deliver the Notes no later than 2:15 p.m., New York
City time, on the settlement date except as to Book-entry Notes described below.
Delivery of Prospectus
- ----------------------
A copy of the Prospectus as most recently amended or
supplemented on the date of delivery thereof (except as provided below) must be
delivered to a purchaser prior to or together with the earlier of the delivery
of (i) the written confirmation provided for above, and (ii) any Note purchased
by such purchaser. (For this purpose, entry of an SDFS deliver order through
DTC's Participant Terminal System to credit a Note to the account of a
Participant purchasing, or acting for the purchaser of, a Note shall be deemed
to constitute delivery of such Note.) The Company shall ensure that the
Presenting Distributor receives copies of the Prospectus and each amendment or
supplement thereto (including appropriate Pricing Supplements) in such
quantities and within such time limits as will enable the Presenting Distributor
to deliver such confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the first sentence of this paragraph. If,
since the date of acceptance of a purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of Notes on terms different from
those agreed to between the Company and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus.
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Authenticity of Signatures
- --------------------------
The Company will cause the Trustee to furnish the Distributors
from time to time with the specimen signatures of each of the Trustee's
officers, employees or agents who have been authorized by the Trustee to
authenticate Notes, but no Distributor will have any obligation or liability to
the Company or the Trustee in respect of the authenticity of the signature of
any officer, employee or agent of the Company or the Trustee on any Note or the
Global Note (as defined in Part III).
Advertising Expenses
- --------------------
The Company will determine with the Distributors the amount of
advertising that may be appropriate in offering the Notes. Advertising expenses
will be paid by the Company.
Market Day
- ----------
"Market Day" means (a) with respect to any Note (unless
otherwise provided in this definition), any day that is a Business Day in The
City of New York, (b) with respect to LIBOR Notes only, any Business Day in New
York that is also a London Market Day, (c) with respect to Foreign Currency
Notes (other than Foreign Currency Notes denominated in European Currency Units
("ECUs")) only, any day that is a Business Day both in New York and in the
principal financial center in the country of the Specified Currency and (d) with
respect to Foreign Currency Notes denominated in ECU, any date that is a
Business Day in The City of New York that is designated as an ECU settlement day
by the ECU Banking Association in Paris or otherwise generally regarded in the
ECU interbank market as a day in which payments in ECU are made.
Trustee Not to Risk Funds
- -------------------------
Nothing herein shall be deemed to require the Trustee to risk
or expend its own funds in connection with any payment made to the Company, the
Distributors, DTC or any Holder of a Note, it being understood by all parties
that payments made by the Trustee to the Company, the Distributors, DTC or any
Holder of a Note shall be made only to the extent that funds are provided to the
Trustee for such purpose.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
- ----------------------------------------------------------
Form and Denominations
- ----------------------
The Certificated Notes shall be issued only in fully
registered form in denominations of $1,000 and integral multiples of $1,000, or,
in the case of Foreign Currency Notes, in such minimum denomination, not less
than the equivalent of $1,000, and such greater
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denomination or denominations in excess thereof, as shall be set forth in the
applicable Pricing Supplement.
Transfers and Exchanges
- -----------------------
A Certificated Note may be presented for transfer or exchange
at the principal corporate trust office of the Trustee in The City of New York.
Certificated Notes will be exchangeable for other Certificated Notes of any
authorized denominations and of like tenor and in a like aggregate principal
amount, upon surrender of the Certificated Notes to be exchanged at the
corporate trust office of the Trustee. Certificated Notes will not be
exchangeable for Book-Entry Notes.
Payment at Maturity
- -------------------
Upon presentation of each Certificated Note at Maturity, the
Trustee (or a duly authorized Paying Agent) will pay the principal amount
thereof, together with any premium and accrued interest due at Maturity. Such
payment will be made in immediately available funds, provided that the
Certificated Note is presented in time for the Paying Agent to make payment in
such funds in accordance with its normal procedures. The Company will provide
the Trustee (and any Paying Agent) with funds available for immediate use for
such purpose. Certificated Notes presented at Maturity will be canceled by the
Trustee as provided in the Indenture. For special provisions relating to Foreign
Currency Notes, see the section entitled "Special Provisions Relating to Foreign
Currency Notes" in the Prospectus Supplement.
Details for Settlement
- ----------------------
For each offer for Certificated Notes accepted by the Company,
the Presenting Distributor shall communicate to the Company's Treasury
Department prior to 3:00 p.m., New York City time, on the Market Day preceding
the settlement date, by telephone, telex, facsimile transmission or other
acceptable means, the following information (the "Purchase Information"):
1. Exact name in which the Note or Notes are to be
registered ("registered owner").
2. Exact address of registered owner and, if different,
the address for delivery, notices and payment of
principal and any premium and interest.
3. Taxpayer identification number of registered owner.
4. Principal amount of each Note in authorized
denominations to be delivered to registered owner.
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5. Stated Maturity of each Note.
6. In the case of Fixed Rate Notes, the interest rate of
each Note, whether such Note is an Amortizing Note
and, if so, the amortization schedule; in the case of
Floating Rate Notes or Indexed Notes, the interest
rate formula, the Spread or Spread Multiplier (if
any), the maximum or minimum interest rate limitation
(if any), the Calculation or Determination Agent, the
Calculation Dates, the Initial Interest Rate, the
Interest Payment Dates, the Regular Record Dates, the
Index Maturity, the Interest Determination Dates and
the Interest Reset Dates, in each case, to the extent
applicable with respect to each Note.
7. Redemption and/or repayment provisions, if any, of
each Note.
8. Trade date of each Note.
9. Settlement date (Issue Date) of each Note.
10. Presenting Distributor's commission (to be paid in
the form of a discount from the proceeds remitted to
the Company upon settlement).
11. Price.
12. Currency or currency unit in which each Note is to be
denominated and exchange rate applicable to purchase
Foreign Currency Notes to be paid for in U.S.
dollars.
13. Original issue discount, if any.
14. Whether the Company has the option to extend the
Stated Maturity of the Note and if so, the Extension
Period, the Election Dates and the Final Maturity of
such Note.
15. Whether the Note is a Renewable Note, and if it is a
Renewable Note, the Initial Maturity Date and the
Final Maturity Date.
16. In the case of an Indexed Note, any additional
information relevant to determination of the amounts
of principal (and premium, if any) or interest
payable.
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<PAGE>
17. Any additional applicable terms of each Note.
The Issue Date of, and the settlement date for, Certificated
Notes will be the same. Before accepting any offer to purchase Certificated
Notes to be settled in less than three Market Days, the Company shall verify
that the Trustee will have adequate time to prepare and authenticate the Notes.
Immediately after receiving the details for each offer for
Certificated Notes from the Presenting Distributor, the Company will, after
recording the details and any necessary calculations, communicate the Purchase
Information by telephone, telex, facsimile transmission or other acceptable
means, to the Trustee. Each such instruction given by the Company to the Trustee
shall constitute a continuing representation and warranty by the Company to the
Trustee and the Distributors that (i) the issuance and delivery of such Notes
have been duly and validly authorized by the Company and (ii) such Notes, when
completed, authenticated and delivered, shall constitute the valid and legally
binding obligation of the Company. The Trustee will assign to and enter on each
Note a transaction number.
The Company will deliver to the Trustee a pre-printed four-ply
packet for such Certificated Note, which packet will contain the following
documents in forms that have been approved by the Company, the Distributors and
the Trustee:
1. Certificated Note with customer confirmation.
2. Stub One - For the Trustee.
3. Stub Two - For the Presenting Distributor.
4. Stub Three - For the Company.
Prior to 2:00 p.m., New York City time, on the Settlement
Date, the Trustee will complete such Certificated Note and will authenticate
such Certificated Note and deliver it (with the confirmation) and Stubs One and
Two to such Distributor, and such Distributor will acknowledge receipt of the
Note by stamping or otherwise marking Stub One and returning it to the Trustee.
The Trustee will send Stub Three to the Company by first-class mail.
Settlement; Note Deliveries and Cash Payment
- --------------------------------------------
The Company will deliver to the Trustee at the commencement of
the program and from time to time thereafter a supply of duly executed
Certificated Notes with pre-printed control numbers adequate to implement the
program. Upon the receipt of appropriate documentation and instructions from the
Company in accordance with the applicable Officers' Certificate and verification
thereof, the Trustee will cause the Certificated Notes to be completed and
authenticated and hold the Certificated Notes for delivery against payment.
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<PAGE>
The Trustee will deliver the Certificated Notes (with the
confirmation) and Stubs One and Two, in accordance with instructions from the
Company, to the Presenting Distributor. If the Distributor is placing such
Certificated Notes as agent, such delivery will be made for the benefit of the
purchaser only against receipt and the Presenting Distributor will acknowledge
receipt of the Notes through a broker's receipt. Such delivery will be made only
against such acknowledgement of receipt and evidence that instructions have been
given for payment to the Company at such account of the Company as it may
specify in writing, in immediately available funds, of an amount equal to the
principal amount of such Notes, less the applicable commission. If the
Presenting Distributor in any instance advances its own funds, the Company shall
not use any of the proceeds of such sale to acquire securities.
If the Distributor is placing such Certificated Notes as
agent, the Presenting Distributor, as the Company's agent, will deliver the
Notes (with the written confirmation provided for above) to the purchaser
thereof against payment therefor by such purchaser in immediately available
funds.
Delivery of any confirmation or Note to a purchaser thereof by
a Distributor, acting as agent or principal, will be made in compliance with
"Delivery of Prospectus" in Part I above.
Certificated Notes delivered to the Distributors will be sent:
If sent to CS First Boston Corporation
CS First Boston Corporation
Five World Trade Center
7th Floor
New York, New York 10048
Attn: Paul Riley
If sent to Salomon Brothers Inc
Salomon Brothers Inc
c/o The Bank of New York
Dealer Clearance Department
1 Wall Street, 3rd Floor
New York, New York 10005
Attn: For the account of Salomon Brothers Inc
Fails (Distributor Acting as Agent)
- -----------------------------------
In the event that a purchaser shall fail to accept delivery of
and make payment for a Certificated Note on the settlement date, the Presenting
Distributor will notify the Trustee and the
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<PAGE>
Company, by telephone, confirmed in writing. If such Certificated Note has been
delivered to the Presenting Distributor, as the Company's agent, the Presenting
Distributor shall return such Note to the Trustee. If funds have been advanced
for the purchase of such Note, the Trustee will, immediately upon receipt of
such Note, debit the account of the Company for the amount so advanced and the
Trustee shall refund the payment previously made by the Presenting Distributor
in immediately available funds. Such payments will be made on the settlement
date, if possible, and in any event not later than the Market Day following the
settlement date. If the fail shall have occurred for any reason other than the
failure of the Presenting Distributor to provide the Purchase Information to the
Company or to provide a confirmation to the purchaser, the Company will
reimburse the Presenting Distributor on an equitable basis for its loss of the
use of funds during the period when the funds were credited to the account of
the Company.
Immediately upon receipt of the Certificated Note in respect
of which the fail occurred, the Trustee will make appropriate entries in its
records to reflect the fact that the Note was never issued and the Note will be
canceled and disposed of as provided in the Indenture.
PART III: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
- ---------------------------------------------------------
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations (the
"Letter") from the Company and the Trustee to DTC dated as of _______________,
and a Medium-Term Note Certificate Agreement between the Trustee and DTC dated
as of ____________, and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS").
Form, Denominations and Registration
- ------------------------------------
All Book-Entry Notes of the same tenor and having the same
Issue Date, will be represented initially by a single note (a "Global Note") in
fully registered form without coupons. Unless otherwise stated in the applicable
Pricing Supplement, Book-Entry Notes will represent Notes denominated in U.S.
dollars. Global Notes will be issued in denominations of $1,000 and integral
multiples thereof. Global Notes will be denominated in principal amounts not in
excess of $150,000,000. If one or more Book-Entry Notes having an aggregate
principal amount in excess of $150,000,000 would, but not for the preceding
sentence, be represented by a single Global Note, then one Global Note will be
issued to represent each $150,000,000 principal amount of such Book-Entry Note
or Notes and an additional Global Note will be issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In such a case, each of the
Global Notes representing such Book-Entry note or Notes shall be assigned the
same CUSIP number. Each Global Note will be registered in the name of Cede &
Co., as nominee for DTC, on the Security Register maintained under the
Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will designate one or more
participants in DTC (with respect to such Note, the "Participants") to act as
agent or
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<PAGE>
agents for such owner in connection with the book-entry system maintained by
DTC, and DTC will record in book-entry form, in accordance with instructions
provided by such Participants, a credit balance with respect to such Note in the
account of such Participants. The ownership interest of such beneficial owner in
such Note will be recorded through the records of such Participants or through
the separate records of such Participants and one or more indirect participants
in DTC.
CUSIP Numbers
- -------------
The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation
of a series of CUSIP numbers (including tranche numbers), such series consisting
of approximately 900 CUSIP numbers and relating to Global Notes representing
Book-Entry Notes. The Company has obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers and has delivered it to the Trustee
and DTC. The Trustee will assign CUSIP numbers serially to Global Notes as
described below under "Details for Settlement." DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Trustee has assigned
to Global Notes. The Trustee will notify the Company at the time when fewer than
100 of the reserved CUSIP numbers remain unassigned to the Global Notes; and the
Company will reserve additional CUSIP numbers for assignment to Global Notes
representing Book-Entry Notes. Upon obtaining such additional CUSIP numbers, the
Company shall deliver a list of such additional CUSIP numbers to the Trustee and
DTC.
Transfers and Exchanges for the Purpose of Consolidation
- --------------------------------------------------------
Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and, in certain cases, one or
more indirect participants in DTC) acting on behalf of beneficial transferors
and transferees of such Note.
The Trustee may upon notice to the Company deliver to DTC and
the CUSIP Service Bureau at any time a written notice (a copy of which shall be
attached to the Global Note resulting from such exchange) specifying (i) the
CUSIP numbers of two or more outstanding Global Notes that represent Book-Entry
Notes of the same tenor and having the same Issue Date, and for which interest
(if any) has been paid to the same date, (ii) a date occurring at least thirty
days after such written notice is delivered and at least thirty days before the
next Interest Payment Date (if any) for such Notes, on which such Global Notes
shall be exchanged for a single replacement Global Note and (iii) a new CUSIP
number to be assigned to such replacement Global Note. Upon receipt of such a
notice, DTC will send to its Participants (including the Trustee) a written
reorganization notice to the effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee will deliver to the CUSIP
Service Bureau a written notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange date, the CUSIP numbers of
the Global Notes to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes for a single Global
Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Global
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<PAGE>
Notes will, in accordance with CUSIP Service Bureau procedures, be canceled and
not immediately reassigned.
Notice of Interest Payment Dates and Regular Record Dates
- ---------------------------------------------------------
To the extent then known, on the first Market Day of March,
June, September, and December of each year, the Trustee will deliver to the
Company and DTC a written list of Record Dates and Interest Payment Dates that
will occur with respect to Floating Rate Book-Entry Notes during the six-month
period beginning on such first Market Day.
Payments of Principal and Interest
- ----------------------------------
(a) Payments of Interest Only. Promptly after each Regular
Record Date, the Trustee will deliver to the Company and DTC a written notice
specifying by CUSIP number the amount of interest to be paid on each Global Note
on the following Interest Payment Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such amounts. The Company will
confirm with the Trustee the amount payable on each Global Note on such Interest
Payment Date. DTC will confirm the amount payable on each Global Note on such
Interest Payment Date by reference to the daily or weekly bond reports published
by Standard & Poor's Corporation. The Company will pay to the Trustee the total
amount of interest due on such Interest Payment Date (other than at Maturity),
and the Trustee will pay such amount to DTC at the times and in the manner set
forth below under "Manner of Payment".
(b) Payments at Stated Maturity. On or about the first Market
Day of each month, the Trustee will deliver to the Company and DTC a written
list of principal and interest to be paid on each Global Note maturing in the
following month. The Company, the Trustee and DTC will confirm the amounts of
such principal and interest payments with respect to each such Global Note on or
about the fifth Market Day preceding the Stated Maturity of such Global Note.
The Company will pay to the Trustee, as the paying agent, the principal amount
of such Global Note, together with interest due at such Stated Maturity. Upon
surrender of a Global Note, the Trustee will pay such amounts to DTC at the
times and in the manner set forth below under "Manner of Payment". If any Stated
Maturity of a Global Note representing Book-Entry Notes is not a Market Day, the
payment due on such day shall be made on the next succeeding Market Day and no
interest shall accrue on such payment for the period from and after such Stated
Maturity. Promptly after payment to DTC of the principal and any interest due at
the Stated Maturity of such Global Note, the Trustee will cancel such Global
Note and return such Global Note to the Company in accordance with the terms of
the Indenture.
(c) Payment upon Redemption. The Trustee will comply with the
terms of the Letter with regard to redemptions or repayments of the Book-Entry
Notes. In the case of Book-Entry Notes stated by their terms to be redeemable
prior to Stated Maturity, [at least 60 calendar days before the date fixed for
redemption] (the "Redemption Date"), the Company shall notify the Trustee of the
Company's election to redeem such Book-Entry Notes in whole or in part and the
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<PAGE>
principal amount of such Book-Entry Notes to be so redeemed. At least 30
calendar days but not more than 60 calendar days prior to the Redemption Date,
the Trustee shall notify DTC of the Company's election to redeem such Book-Entry
Notes. The Trustee shall notify the Company and DTC of the CUSIP numbers of the
particular Book-Entry Notes to be redeemed either in whole or in part. The
Company, the Trustee and DTC will confirm the amounts of such principal and any
premium and interest payable with respect to each such Book-Entry Note on or
about the fifth Market Day preceding the Redemption Date of such Book-Entry
Note. The Company will pay the Trustee, in accordance with the terms of the
Indenture, the amount necessary to redeem each such Book-Entry Note or the
applicable portion of each such Book-Entry Note. The Trustee will pay such
amount to DTC at the times and in the manner set forth herein. Promptly after
payment to DTC of the amount due on the Redemption Date for such Book-Entry
Note, the Trustee shall cancel any such Book-Entry Note redeemed in whole and
shall deliver it to the Company with an appropriate debit advice. If a Global
Note is to be redeemed in part, the Trustee will cancel such Global Note and
issue a Global Note which shall represent the remaining portion of such Global
Note and shall bear the CUSIP number of the canceled Global Note.
(d) Manner of Payment. The total amount of any principal and
interest due on Global Notes on any Interest Payment Date or at Maturity shall
be paid by the Company to the Trustee in immediately available funds on such
date available for use as of 9:30 A.M. New York City time. The Company will make
such payment on such Global Notes by wire transfer to the Trustee. The Company
will confirm instructions regarding payment in writing to the Trustee. Prior to
1:00 p.m., New York City time, on each date of Maturity of a Book-Entry Note or
as soon as possible thereafter, the Trustee will pay by separate wire transfer
(using Fedwire message entry instructions in a form previously specified by DTC)
to an account at the Federal Reserve Bank of New York previously specified by
DTC in funds available for immediate use by DTC, each payment of principal
(together with interest thereon) due at Maturity on Book-Entry Notes. On each
Interest Payment Date, interest payment shall be made to DTC in same day funds
in accordance with existing arrangements between the Trustee and DTC.
Thereafter, on each such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds available for
immediate use to the respective Participants in whose names the Book-Entry Notes
represented by such Global Notes are recorded in the book-entry system
maintained by DTC. NEITHER THE COMPANY NOR THE TRUSTEE SHALL HAVE ANY DIRECT
RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS OF THE
PRINCIPAL OF AND ANY PREMIUM AND INTEREST ON THE BOOK-ENTRY NOTES.
(e) Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
Details for Settlement
- ----------------------
For each offer for Book-Entry Notes accepted by the Company,
the Presenting Distributor shall communicate to the Company's Treasury
Department prior to 11:00 a.m., New
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<PAGE>
York City time, on the first Market Day after the sale date (or on the sale date
if such sale is to be settled within one Market Day), by telephone, telex,
facsimile transmission or other acceptable means, the following information (the
"Purchase Information"):
1. Principal amount of the Notes.
2. Stated Maturity of the Notes.
3. In the case of Fixed Rate Notes, the interest rate of
the Notes and whether such Note is an Amortizing
Note, and, if so, the amortization schedule; in the
case of Floating Rate Notes or Indexed Notes,
interest rate formula, the Spread or Spread
Multiplier (if any), the maximum or minimum Interest
rate limitation (if any), the Calculation or
Determination Agent, the Calculation Dates, the
Initial Interest Rate, the Interest Payment Dates,
the Regular Record Dates, the Index Maturity, the
Interest Determination Dates and the Interest Reset
Dates, in each case, to the extent applicable with
respect to the Notes.
4. Redemption and/or repayment provisions, if any, of
the Notes.
5. Trade date of the Notes.
6. Settlement date (Issue Date) of the Notes.
7. Presenting Distributor's commission (to be paid in
the form of a discount from the proceeds remitted to
the Company upon settlement).
8. Price.
9. Currency or currency unit in which the Notes are to
be denominated and exchange rate applicable to
purchase Foreign Currency Notes payable in U.S.
dollars.
10. Original issue discount, if any.
11. Whether the Company has the option to extend the
Stated Maturity of the Note and if so, the Extension
Period, the Election Dates and the Final Maturity of
such Note.
C-17
<PAGE>
12. Whether the Note is a Renewable Note, and if it is a
Renewable Note, the Initial Maturity Date and the
Final Maturity Date.
13. In the case of an Indexed Note, any additional
information relevant to determination of the amounts
of principal (and premium, if any) or interest
payable.
14. Any additional applicable terms of the Notes.
The Issue Date of, and the settlement date for, Book-Entry
Notes will be the same. Before accepting any offer to purchase Book-Entry Notes
to be settled in less than three Market Days, the Company shall verify that the
Trustee will have adequate time to prepare and authenticate the Global Notes.
If the initial interest rate for a Floating Rate Book-Entry
Note has not been determined at the time that the foregoing procedure is
completed, the procedures described in the following two paragraphs shall be
completed as soon as such rate has been determined but no later than 12:00 Noon
and 2:00 p.m., New York City time, as the case may be, on the Market Day before
the settlement date.
Immediately after receiving the details for each offer for
Book-Entry Notes from the Presenting Distributor and in any event no later than
12:00 Noon, New York City time, on the first Market Day after the sale date (or
on the sale date if such sale is to be settled within one Market Day), the
Company will, after recording the details and any necessary calculations,
communicate the Purchase Information by telephone, telex, facsimile transmission
or other acceptable means, to the Trustee. Each such instruction given by the
Company to the Trustee shall constitute a continuing representation and warranty
by the Company to the Trustee and the Distributors that (i) the issuance and
delivery of such Note have been duly and validly authorized by the Company and
(ii) such Note, when duly issued, shall constitute the valid and legally binding
obligation of the Company.
Immediately after receiving the Purchase Information from the
Company and in any event no later than 2:00 P.M., New York City time, on the
first Market Day after the sale date (or on the sale date if such sale is to be
settled within one Market Day), the Trustee will assign a CUSIP number to the
Global Note representing such Book-Entry Note and will telephone the Company and
advise the Company of such CUSIP number and, as soon thereafter as practicable,
the Company shall notify the Presenting Distributor of such CUSIP number. The
Trustee will enter a pending deposit message through DTC's Participant Terminal
System, providing settlement information to DTC (which shall route such
information to Standard & Poor's Corporation). Standard & Poor's Corporation
will use the information received in the pending deposit message to include the
amount of any interest payable and certain other information regarding the
related Global Note in the appropriate daily or weekly bond report published by
Standard & Poor's Corporation.
C-18
<PAGE>
Settlement; Global Note Delivery and Cash Payment
- -------------------------------------------------
The Company will deliver to the Trustee at the commencement of
the program and from time to time thereafter a supply of duly executed Global
Notes with pre-printed control numbers adequate to implement the program. Upon
the receipt of appropriate documentation and instructions from the Company in
accordance with the applicable Officers' Certificate and verification thereof,
the Trustee will cause the Global Note to be completed and authenticated and
hold the Global Note for delivery against payment.
Prior to 10:00 a.m., New York City time, on the Settlement
Date, the Trustee will enter instructions through DTC's Participant Terminal
System, using the function MT II, and DTC will credit such Note to the Trustee's
participant account at DTC. Prior to 2:00 p.m., New York City time, on the
Settlement Date, the Trustee will enter an SDFD deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such Note to the Presenting
Distributor's participant account and (ii) debit the Presenting Distributor's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Note less such Distributor's commission (in
accordance with SDFS operating procedures in effect on the Settlement Date). The
entry of such a deliver order shall constitute a representation and warranty by
the Trustee to DTC that (i) the Global Note representing such Book-Entry Note
has been executed, delivered and authenticated and (ii) the Trustee is holding
such Global Note pursuant to the relevant Medium-Term Note Certificate Agreement
between the Trustee and DTC.
Prior to 2:00 p.m., New York City time, on the Settlement Date
unless the Presenting Distributor is the end purchaser of such Note, the
Presenting Distributor will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Note to such
Distributor's participant account and credit such Note to the Participant
accounts of the Participants with respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement account of
such Distributor for an amount equal to the price of such Note (in accordance
with SDFS operating procedures in effect on the settlement date).
Transfers of funds are subject to extension in accordance with
any extension of Fedwire closing deadlines and in the other events specified in
the SDFS operating procedures in effect on the settlement date.
The Trustee, upon confirming receipt of such funds, will wire
transfer the amount transferred to the Trustee, in funds available for immediate
use, for the account of the Company, to account no. __________ at [name of
bank], [location of bank] (ABA No. __________).
Unless the Presenting Distributor is the end purchaser of such
Note, such Distributor will confirm the purchase of such Note to the purchaser
either by transmitting to the Participants with respect to such Note a
confirmation order or orders through DTC's institutional delivery system or by
mailing a written confirmation to such purchaser.
C-19
<PAGE>
Fails
- -----
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Company shall notify the Trustee, and upon receipt of such
notice, the Trustee will deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by no later than 2:00 p.m., New
York City time, on the Market Day immediately preceding the scheduled settlement
date.
If the Agent or Trustee has not entered an SDFS deliver order
with respect to a Book-Entry Note, then upon written request (which may be
evidenced by telecopy transmission) of the Company, the Trustee shall deliver to
DTC, through DTC's Participant Terminal System, as soon as practicable, but no
later than 2:00 p.m., New York City time, on any Market Day, a withdrawal
message instructing DTC to debit such Note to the Trustee's participant account.
DTC will process the withdrawal message, provided that the Trustee's participant
account contains a principal amount of the Global Note representing such Note
that is at least equal to the principal amount to be debited. If withdrawal
messages are processed with respect to all the Book-Entry Notes represented by a
Global Note, the Trustee will mark such Global Note "cancelled", make
appropriate entries in the Trustee's records and send such cancelled Global Note
to the Company. The CUSIP number assigned to such Global Note shall, in
accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. If withdrawal messages are processed with respect to one
or more, but not all, of the Book-Entry Notes represented by a Global Note, the
Trustee will exchange such Global Note for two Global Notes, one of which shall
represent such Book-Entry Note or Notes and shall be cancelled immediately after
issuance and the other of which shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the beneficial purchaser
thereof (or a person, including an indirect participant in DTC, acting on behalf
of such purchaser), such Participants and, in turn, the Presenting Distributor
may enter an SDFS deliver order through DTC's Participant Terminal System
debiting such Note to such Distributor's participant account and crediting such
Note [free] to the participant account of the Trustee and shall notify the
Trustee and the Company thereof. Thereafter, the Trustee, (i) will immediately
notify the Company, once the Trustee has confirmed that such Note has been
credited to its participant account, and the Company shall immediately transfer
by Fedwire (in immediately available funds) to the Presenting Distributor an
amount equal to the price of such Note which was previously sent by wire
transfer to the account of the Company maintained at _______________, and (ii)
the Trustee will deliver the withdrawal message and take the related actions
described in the preceding paragraph. Such debits and credits will be made on
the settlement date, if possible, and in any event not later than 5:00 p.m.
__________ time on the following Market Day. If the fail shall have occurred for
any reason other than failure of the Presenting Distributor to provide the
Purchase Information to the Company or to provide a confirmation to the
purchaser, the Company will reimburse the
C-20
<PAGE>
Presenting Distributor on an equitable basis for its loss of the use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Note, the Trustee will provide for the authentication
and issuance of a Global Note representing the other Book-Entry Notes to have
been represented by such Global Note and will make appropriate entries in its
records.
<PAGE>
Arizona Public Service Company
("Company")
Medium-Term Notes, Series A
Due Nine Months or More from Date of Issue
TERMS AGREEMENT
---------------
November 19, 1996
Arizona Public Service Company
400 North 5th Street
Phoenix, AZ 85004
Attention: Treasurer
Ladies and Gentlemen:
We offer to purchase, on and subject to the terms and
conditions of the Distribution Agreement filed as an exhibit to the Company's
registration statement on Form S-3 (No. 333-15379) ("Distribution Agreement"),
the following Securities ("Notes") on the following terms:
Title: 6-3/4% Senior Notes Due 2006
Currency or Currency Units: United States dollars
Stated Maturity: November 15, 2006
Principal Amount: $100,000,000
Public Offering Price: 99.639%
Original Issue Discount Security: Yes ____ No X
Denominations: $1,000 and integral multiples thereof.
Purchase Price (to be paid in immediately available funds):
98.989%, plus accrued interest, if any, from November 15, 1996
to the Settlement Date
Underwriting Discount or Commission received from the Company
(%): .650%
Proceeds to Company (If different from Public Offering Price)
(%): 98.989%
Optional Redemption (option of the Company): As described in
the Prospectus Supplement, dated November 19, 1996 (the "First
Prospectus Supplement")
<PAGE>
Optional Redemption (option of the Holder): None
Sinking Fund: None
Other Terms: None
Trade Date: November 19, 1996
Settlement Date (Issue Date): November 22, 1996
* * * * *
Details for Settlement
- ----------------------
Exact name in which the Note or Notes are to be
registered ("registered owner"): Cede & Co.
Principal amount of each Note in authorized
denominations to be delivered to registered owner:
$100,000,000
* * * * *
Our agreement to purchase the Notes hereunder is subject to
the conditions set forth in the Distribution Agreement, including the
conditions, and the delivery of the documents, set forth in Section 5 thereof.
If for any reason the purchase by the undersigned of the Notes is not
consummated other than because of a default by the undersigned or a failure to
satisfy a condition set forth in clause (ii), (iii) or (v) of Section 5(c) of
the Distribution Agreement, the Company shall reimburse the undersigned for all
out-of-pocket expenses reasonably incurred by the undersigned in connection with
the offering of the Notes and not otherwise required to be reimbursed pursuant
to Section 4 of the Distribution Agreement.
The Notes will have the terms described in the Prospectus, as
amended on November 19, 1996 and supplemented by the First Prospectus
Supplement, referred to in Section 2(a) of the Distribution Agreement. No
Pricing Supplement will be prepared for the Notes.
The principal amount of Notes to be purchased by each
Distributor is as specified in the First Prospectus Supplement. The obligations
of the Distributors to purchase the Notes shall be several and not joint.
Notwithstanding the terms of the Distribution Agreement, the
Company and the Distributors agree that the Company shall prepare the Prospectus
Supplement within a reasonable time following the Settlement Date (Issue Date)
for the Senior Notes and, on the date of the filing thereof with the Commission,
to hold the Closing Date specified in Section 3(e) of the Distribution Agreement
at 8:00 A.M., Phoenix time, on such date. On such date, Exhibits A and C to the
Distribution Agreement will be completed and attached to the Distribution
Agreement.
If any Distributor or Distributors default in their
obligations to purchase Notes pursuant to this Terms Agreement and the principal
amount of the Notes that such defaulting Distributor or Distributors agreed but
failed to purchase is ten percent (10%) or less of the principal amount of the
Notes, the Distributors may make arrangements satisfactory to the Company for
the purchase of the Notes by other persons, including any of the Distributors,
but if no such arrangements are made by the Settlement Date (Issue Date) the
nondefaulting Distributors shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Notes that such defaulting
Distributor or Distributors agreed but failed to purchase. If any Distributor or
Distributors so default and the aggregate principal amount of Notes with respect
to which such default or defaults
-2-
<PAGE>
occur is more than the above described amount and arrangements satisfactory to
the remaining Distributors and the Company for purchase of such Notes by other
persons are not made within thirty-six hours after such default, this Terms
Agreement will terminate without liability on the part of any non-defaulting
Distributor, except as provided in Section 9 of the Distribution Agreement. As
used in this Terms Agreement, the term "Distributor" includes any person
substituted for a Distributor under this paragraph. Nothing herein will relieve
a defaulting Distributor from liability for its default.
CS First Boston Corporation is acting as representative for
the Distributors specified in the First Prospectus Supplement in connection with
the offering to which this Terms Agreement relates, and any action under this
Terms Agreement taken by CS First Boston Corporation in such capacity will be
binding upon the Distributors to which this Terms Agreement relates.
This Terms Agreement shall constitute an agreement between the
Company and the undersigned for the sale and purchase of the Notes upon the
terms set forth herein and in the Distribution Agreement.
Very truly yours,
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
PAINEWEBBER INCORPORATED
By: CS FIRST BOSTON CORPORATION
By Thomas R. Osborne
----------------------------
Vice President
Accepted and agreed to
as of the date set forth above.
ARIZONA PUBLIC SERVICE COMPANY
By Nancy E. Newquist
-----------------------
Treasurer
-3-
================================================================================
Exhibit 4.1
ARIZONA PUBLIC SERVICE COMPANY
(formerly Central Arizona Light and Power Company)
TO
THE BANK OF NEW YORK
As trustee under Central Arizona Light and
Power Company's Mortgage and Deed of
Trust, Dated as of July 1, 1946.
---------------
Fifty-fourth Supplemental Indenture
---------------
Dated as of November 15, 1996
This Mortgage covers real property,
personal property and chattels.
This instrument and the above-mentioned Mortgage and
Deed of Trust contain after-acquired property provisions.
================================================================================
<PAGE>
FIFTY-FOURTH SUPPLEMENTAL INDENTURE
---------------
INDENTURE, dated as of the 15th day of November, 1996, made and entered
into by and between ARIZONA PUBLIC SERVICE COMPANY, a corporation of the State
of Arizona, the principal place of business and mailing address of which is 400
North Fifth Street, Phoenix, Arizona 85004 (hereinafter sometimes called the
Company), party of the first part, and THE BANK OF NEW YORK, a New York banking
corporation, the mailing address of which is 101 Barclay Street, 21st Floor
West, New York, New York 10286 (hereinafter sometimes called the Trustee), party
of the second part, as Trustee under the Mortgage and Deed of Trust, dated as of
July 1, 1946 (hereinafter called the Mortgage), which Mortgage was executed and
delivered by the Company under its former name, Central Arizona Light and Power
Company, to secure the payment of bonds issued or to be issued under and in
accordance with the provisions of the Mortgage, reference to which said Mortgage
is hereby made, this Indenture (hereinafter called the Fifty-fourth Supplemental
Indenture) being supplemental thereto;
WHEREAS, said Mortgage was recorded and filed in Counties in the State
of Arizona as follows:
<TABLE>
<CAPTION>
Filed and Abstracted
Recorded as Real Mortgage as Chattel Mortgage
----------------------------------- ---------------------
Chattel
Date Book or Mortgage
County Recorded Docket Page Book Page
------ -------- ------ ---- ------------ ----
<S> <C> <C> <C> <C> <C>
Apache........................... 7-28-50 16 1 9 154
Cochise.......................... 2-3-53 80 28 19 292
Coconino......................... 1-20-53 39 1 10 286
Gila............................. 1-17-53 32 84 17 __
Graham........................... 12-3-63 92 87 15 223
Maricopa......................... 8-6-46 408 163 92 204
Mohave........................... 11-13-57 28 68 12 13
Navajo........................... 10-14-49 31 483 16 521
Pima............................. 1-24-53 558 351 14 __
Pinal............................ 10-25-52 68 31 12 591
Yavapai.......................... 8-7-46 79 1 12 223
Yuma............................. 8-1-47 58 173 21 265
and in Counties in the State of New Mexico as follows:
McKinley......................... 5-31-61 36 153 4 295
San Juan......................... 1-31-61 472 140 (No. 72441)
</TABLE>
the copy recorded in Yuma County, Arizona also being effective for La Paz
County, Arizona, formed on December 31, 1982; and copies of said Mortgage were
filed with the office of the Bureau of Indian Affairs at Window Rock, Arizona,
and with the Navajo Tribe of Indians at Window Rock, Arizona, and in the offices
of the Secretary of State and the State Land Department of the State of Arizona
(all the said counties and the said offices above referred to being herein
referred to as "jurisdictions"); and
<PAGE>
WHEREAS, by the Mortgage, the Company covenanted that it would execute
and deliver such supplemental indenture or indentures and such further
instruments and do such further acts as might be necessary or proper to carry
out more effectually the purposes of the Mortgage and to make subject to the
Lien of the Mortgage any property thereafter acquired, made or constructed and
intended to be subject to the Lien thereof; and
WHEREAS, the Company has executed and delivered to the Trustee
fifty-three indentures supplemental to the Mortgage (hereinafter respectively
called the First through the Fifty-third Supplemental Indentures) dated as of
December 1, 1947, April 1, 1949, February 1, 1950, December 1, 1950, February 1,
1953, November 1, 1953, March 1, 1954, October 1, 1957, March 1, 1959, November
1, 1961, June 1, 1962, December 1, 1962, September 1, 1963, September 1, 1967,
April 1, 1970, March 15, 1972, April 1, 1974, February 15, 1975, June 1, 1975,
November 15, 1975, April 15, 1977, January 15, 1978, March 1, 1979, October 15,
1979, May 15, 1980, February 2, 1982, April 15, 1982, July 1, 1983, October 15,
1983, June 15, 1984, January 15, 1985, May 1, 1985, June 1, 1985, November 1,
1985, January 15, 1986, March 1, 1986, May 1, 1986, February 1, 1987, June 1,
1987, November 15, 1987, April 1, 1989, February 15, 1990, May 15, 1990, April
15, 1991, December 15, 1991, January 15, 1992, March 1, 1992, June 15, 1992,
February 1, 1993, August 1, 1993, August 1, 1993, September 15, 1993, and March
1, 1994, each of which has been or will be recorded or filed in, or a recording
or filing is or will be effective with respect to, each jurisdiction referred to
above; and
WHEREAS, in addition to the property described in the Mortgage, as
heretofore supplemented and amended, the Company has acquired certain other
property, rights and interests in property; and
WHEREAS, the Company has heretofore issued, in accordance with the
provisions of the Mortgage, as heretofore supplemented and amended, bonds of a
series entitled and designated First Mortgage Bonds, 2 3/4% Series due 1976
(hereinafter called the bonds of the First Series), in the aggregate principal
amount of Eight Million Five Hundred Thousand Dollars ($8,500,000); bonds of a
series entitled and designated First Mortgage Bonds, 3 1/8% Series due 1977
(hereinafter called the bonds of the Second Series), in the aggregate principal
amount of Two Million Five Hundred Thousand Dollars ($2,500,000); bonds of a
series entitled and designated First Mortgage Bonds, 3% Series due 1979
(hereinafter called the bonds of the Third Series), in the aggregate
2
<PAGE>
principal amount of Four Million Dollars ($4,000,000); bonds of a series
entitled and designated First Mortgage Bonds, 2 3/4% Series due 1980
(hereinafter called the bonds of the Fourth Series), in the aggregate principal
amount of Five Million Dollars ($5,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 2 7/8% Series due 1980 (hereinafter called the
bonds of the Fifth Series), in the aggregate principal amount of Six Million
Dollars ($6,000,000); bonds of a series entitled and designated First Mortgage
Bonds, 3 1/2% Series due 1983 (hereinafter called the bonds of the Sixth
Series), in the aggregate principal amount of Fourteen Million Five Hundred
Thousand Dollars ($14,500,000); bonds of a series entitled and designated First
Mortgage Bonds, 3 1/2% Series due November 1, 1983 (hereinafter called the bonds
of the Seventh Series), in the aggregate principal amount of Five Million Seven
Hundred Twenty-three Thousand Dollars ($5,723,000); bonds of a series entitled
and designated First Mortgage Bonds, 3 1/4% Series due 1984 (hereinafter called
the bonds of the Eighth Series), in the aggregate principal amount of Fifteen
Million Dollars ($15,000,000); bonds of a series entitled and designated First
Mortgage Bonds, 5 1/8% Series due 1987 (hereinafter called the bonds of the
Ninth Series), in the aggregate principal amount of Fifteen Million Dollars
($15,000,000); bonds of a series entitled and designated First Mortgage Bonds,
4.70% Series due 1989 (hereinafter called the bonds of the Tenth Series), in the
aggregate principal amount of Twenty Million Dollars ($20,000,000); bonds of a
series entitled and designated First Mortgage Bonds, 4.80% Series due 1991
(hereinafter called the bonds of the Eleventh Series), in the aggregate
principal amount of Thirty-five Million Dollars ($35,000,000); bonds of a series
entitled and designated First Mortgage Bonds, 4.45% Series due 1992 (hereinafter
called the bonds of the Twelfth Series), in the aggregate principal amount of
Twenty-five Million Dollars ($25,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 4.40% Series due 1992 (hereinafter called the
bonds of the Thirteenth Series), in the aggregate principal amount of
Twenty-five Million Dollars ($25,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 4.50% Series due 1993 (hereinafter called the
bonds of the Fourteenth Series), in the aggregate principal amount of Fifteen
Million Dollars ($15,000,000); bonds of a series entitled and designated First
Mortgage Bonds, 6.25% Series due 1997 (hereinafter called the bonds of the
Fifteenth Series), in the aggregate principal amount of Twenty-five Million
Dollars ($25,000,000); bonds of a series entitled and designated First Mortgage
Bonds, 8.50% Series due 1975 (hereinafter called the bonds of the Sixteenth
Series), in the aggregate principal amount of Thirty Million Dollars
($30,000,000); bonds of a series entitled and designated First Mortgage Bonds,
7.45% Series due 2002 (hereinafter called the bonds of the Seventeenth Series),
in the aggregate principal amount of Sixty Million Dollars ($60,000,000); bonds
of a series entitled and designated First Mortgage Bonds, 6.20% Series due 2004
(hereinafter called the bonds of the Eighteenth Series), in the aggregate
principal amount of Fifty Million Dollars ($50,000,000); bonds of a series
entitled and designated First Mortgage Bonds, 9.50% Series due 1982 (hereinafter
called the bonds of the Nineteenth Series), in the aggregate principal amount of
One Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 9.80% Series due 1980 (hereinafter called the
bonds of the Twentieth Series), in the aggregate principal amount of
Seventy-five Million Dollars ($75,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 10.625% Series due 2000 (hereinafter called the
bonds of the Twenty-first Series), in the aggregate principal amount of
Seventy-five Million Dollars ($75,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 6.45% Series A due 2007 (hereinafter called the
bonds of the Twenty-second Series), in the aggregate principal amount of
Thirteen Million Dollars ($13,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 6.45% Series B due 2007 (hereinafter called the
bonds of the Twenty-third Series), in the aggregate principal amount of Thirty
Million Dollars ($30,000,000); bonds of a series entitled and designated First
Mortgage Bonds, 6% Series A due 2008 (hereinafter called the bonds of the
Twenty-fourth Series), in the aggregate principal amount of Thirty-four Million
Dollars ($34,000,000); bonds of a series entitled and designated First Mortgage
Bonds, 9.95% Series due 2004 (hereinafter called the bonds of the Twenty-fifth
Series), in the aggregate principal amount of Seventy-five Million Dollars
($75,000,000); bonds of a series entitled and designated First Mortgage Bonds,
12 1/8% Series due 2009 (hereinafter called the bonds of the Twenty-sixth
Series), in the aggregate principal amount of Seventy-five Million Dollars
($75,000,000); bonds of a series entitled and designated First Mortgage Bonds,
12 7/8% Series due 2000 (hereinafter called the bonds of the Twenty-seventh
Series), in the aggregate principal amount of One Hundred Eighty-five Million
Dollars ($185,000,000); bonds of a series entitled and designated First Mortgage
Bonds, 10 3/8% Series due 1985 (hereinafter called the bonds of the
Twenty-eighth Series), in the aggregate principal amount of Sixty Million Two
Hundred Fifty Thousand Dollars ($60,250,000); bonds of a series entitled and
designated First Mortgage Bonds, 16% Series due 1992 (hereinafter called the
bonds of the Twenty-ninth Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 12 3/4% Series due 2013 (hereinafter called the
bonds of the Thirtieth Series), in the aggregate principal amount of One Hundred
Million Dollars ($100,000,000); bonds of a series entitled and designated First
Mortgage Bonds, 13 1/2% Series due 2013 (hereinafter called the bonds of the
Thirty- first Series), in the aggregate principal amount of One Hundred Million
Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage
Bonds, 15% Series due 1994 (hereinafter called the bonds of the Thirty-second
Series), in the aggregate principal amount of One Hundred Million Dollars
($100,000,000); bonds of a series entitled and designated First Mortgage Bonds,
12% Series due 1995 (hereinafter called the bonds of the
3
<PAGE>
Thirty-third Series), in the aggregate principal amount of One Hundred
Twenty-five Million Dollars ($125,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 13 1/4% Series due 2007 (hereinafter called the
bonds of the Thirty-fourth Series), in the aggregate principal amount of Fifty
Million Dollars ($50,000,000); bonds of a series entitled and designated First
Mortgage Bonds, 11 1/2% Series due 2015 (hereinafter called the bonds of the
Thirty-fifth Series), in the aggregate principal amount of One Hundred Fifty
Million Dollars ($150,000,000); bonds of a series entitled and designated First
Mortgage Bonds, 11 1/2% Series due November 1, 2015 (hereinafter called the
bonds of the Thirty-sixth Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 11% Series due 2016 (hereinafter called the
bonds of the Thirty-seventh Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 9 1/4% Series due 1996 (hereinafter called the
bonds of the Thirty-eighth Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 9% Series due 1996 (hereinafter called the
bonds of the Thirty-ninth Series), in the aggregate principal amount of One
Hundred Twenty-five Million Dollars ($125,000,000); bonds of a series entitled
and designated First Mortgage Bonds, 9% Series due 2017 (hereinafter called the
bonds of the Fortieth Series), in the aggregate principal amount of One Hundred
Fifty Million Dollars ($150,000,000); bonds of a series entitled and designated
First Mortgage Bonds, 9 7/8% Series due 1997 (hereinafter called the bonds of
the Forty-first Series), in the aggregate principal amount of One Hundred
Twenty-five Million Dollars ($125,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 10 3/4% Series due 2017 (hereinafter called the
bonds of the Forty-second Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 10 3/4% Series due 2019 (hereinafter called the
bonds of the Forty-third Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 10 1/4% Series due 2000 (hereinafter called the
bonds of the Forty-fourth Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 10 1/4% Series due 2020 (hereinafter called the
bonds of the Forty-fifth Series), in the aggregate principal amount of One
Hundred Twenty-five Million Dollars ($125,000,000); bonds of a series entitled
and designated First Mortgage Bonds, 9 1/2% Series due 2021 (hereinafter called
the bonds of the Forty-sixth Series), in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 9% Series due 2021 (hereinafter called the
bonds of the Forty-seventh Series), in the aggregate principal amount of One
Hundred Fifty Million Dollars ($150,000,000); bonds of a series entitled and
designated First Mortgage Bonds, 7 1/8% Series due 1997, in the aggregate
principal amount of One Hundred Fifty Million Dollars ($150,000,000), and bonds
of a series entitled and designated First Mortgage Bonds, 8 3/4% Series due
2024, in the aggregate principal amount of One Hundred Seventy-five Million
Dollars ($175,000,000) (hereinafter collectively called the bonds of the
Forty-eighth Series); bonds of a series entitled and designated First Mortgage
Bonds, 7 5/8% Series due 1998, in the aggregate principal amount of One Hundred
Million Dollars ($100,000,000), and bonds of a series entitled and designated
First Mortgage Bonds, 8 1/8% Series due 2002, in the aggregate principal amount
of One Hundred Twenty-five Million Dollars ($125,000,000) (hereinafter
collectively called the bonds of the Forty-ninth Series); bonds of a series
entitled and designated First Mortgage Bonds, 7 5/8% Series due 1999
(hereinafter called the bonds of the Fiftieth Series), in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000); bonds of a
series entitled and designated First Mortgage Bonds, 8% Series due 2025
(hereinafter called the bonds of the Fifty-first Series), in the aggregate
principal amount of One Hundred Fifty Million Dollars ($150,000,000); bonds of a
series entitled and designated First Mortgage Bonds, 7 1/4% Series due 2023
(hereinafter called the bonds of the Fifty-second Series), in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000); bonds of a
series entitled and designated First Mortgage
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Bonds, 5 7/8% Series due 2028 (hereinafter called bonds of the Fifty-third
Series), in the aggregate principal amount of Twelve Million Eight Hundred Fifty
Thousand Dollars ($12,850,000); bonds of a series entitled and designated First
Mortgage Bonds, 5 7/8% Series due 2028 (hereinafter called bonds of the
Fifty-fourth Series), in the aggregate principal amount of One Hundred Forty-one
Million One Hundred Fifty Thousand Dollars ($141,150,000); bonds of a series
entitled and designated First Mortgage Bonds, 5 1/2% Series due 2028
(hereinafter called bonds of the Fifty- fifth Series), in the aggregate
principal amount of Twenty-five Million Dollars ($25,000,000); bonds of a series
entitled and designated First Mortgage Bonds, 5 3/4% Series due 2000
(hereinafter called bonds of the Fifty-sixth Series) in the aggregate principal
amount of One Hundred Million Dollars ($100,000,000); and bonds of a series
entitled and designated First Mortgage Bonds, 6 5/8% Series due 2004
(hereinafter called bonds of the Fifty-seventh Series) in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000); and
WHEREAS, said The Bank of New York, by an instrument in writing,
effective on the opening of business on September 29, 1995, succeeded to Bank of
America National Trust and Savings Association as Trustee under the Mortgage;
and, pursuant to Section 104 of the Mortgage, The Bank of New York is the
successor Trustee under the Mortgage; and
WHEREAS, Section 8 of the Mortgage provides that the form of each
series of bonds (other than bonds of the First Series) issued thereunder shall
be established by Resolution of the Board of Directors of the Company and that
the form of each series, as established by said Board of Directors, shall
specify the descriptive title of the bonds and various other terms thereof, and
may also contain such provisions not inconsistent with the provisions of the
Mortgage as the Board of Directors may, in its discretion, cause to be inserted
therein expressing or referring to the terms and conditions upon which such
bonds are to be issued and/or secured under the Mortgage; and
WHEREAS, Section 120 of the Mortgage provides, among other things, that
any power, privilege or right expressly or impliedly reserved to or in any way
conferred upon the Company by any provision of the Mortgage, whether such power,
privilege or right is in any way restricted or is unrestricted, may be in whole
or in part waived or surrendered or subjected to any restriction if at the time
unrestricted or to additional restriction if already restricted, and the Company
may enter into any further covenants, limitations or restrictions for the
benefit of any one or more series of bonds issued thereunder, or the Company may
cure any ambiguity contained therein, or in any supplemental indenture, or may
establish the terms and provisions of any series of bonds other than said First
Series, by an instrument in writing executed and acknowledged by the Company in
such manner as would be necessary to entitle a conveyance of real estate to
record in all of the states in which any property at the time subject to the
Lien of the Mortgage shall be situated; and
WHEREAS, the Company now desires to create a new series of bonds to be
issued under and pursuant to the Mortgage in accordance with the provisions of
Article VI thereof, and to add to its covenants and agreements contained in the
Mortgage, as heretofore supplemented and amended, certain other covenants and
agreements to be observed by it and to alter and amend in certain respects the
covenants and provisions contained in the Mortgage, as heretofore supplemented
and amended; and
WHEREAS, the Company has agreed to issue One Hundred Million Dollars
($100,000,000) in aggregate principal amount of its 6-3/4% Senior Notes Due 2006
(the "Senior Notes Due 2006") pursuant to the provisions of the Indenture dated
as of November 15, 1996 (the "Senior Note Indenture"), between the Company and
The Bank of New York, as trustee (said trustee or any successor trustee under
the Senior Note Indenture being hereinafter referred to as the "Senior Note
Trustee"), as supplemented by the First
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Supplemental Indenture, dated as of November 15, 1996, between the Company and
the Senior Note Trustee; and
WHEREAS, in order to secure the Company's obligation to pay principal,
premium, if any, and interest on the Senior Notes Due 2006 prior to the Release
Date (as hereinafter defined), the Company desires to provide for the issuance
under the Mortgage to the Senior Note Trustee of a new series of bonds
designated "First Mortgage Bonds, Senior Note Series A," having the same rate of
interest, interest payment dates, maturity date and redemption provisions and in
the same aggregate principal amount as the Senior Notes Due 2006; and
WHEREAS, the execution and delivery by the Company of this Fifty-fourth
Supplemental Indenture, and the terms of the bonds of the Fifty-eighth Series
hereinafter referred to, have been duly authorized by the Board of Directors of
the Company by appropriate Resolutions of said Board of Directors;
NOW THEREFORE, THIS INDENTURE WITNESSETH: That Arizona Public Service
Company, in consideration of the premises and of One Dollar to it duly paid by
the Trustee at or before the ensealing and delivery of these presents, the
receipt whereof is hereby acknowledged, and in further evidence of assurance of
the estate, title and rights of the Trustee and in order further to secure the
payment of both the principal of and interest and premium, if any, on the bonds
from time to time heretofore, herewith or hereafter issued under the Mortgage,
according to their tenor and effect, and the performance of all the provisions
of the Mortgage (including any instruments supplemental thereto and any
modifications made as in the Mortgage provided) and of said bonds, hereby
grants, bargains, sells, releases, conveys, assigns, transfers, mortgages,
pledges, sets over and confirms (subject, however, to Excepted Encumbrances as
defined in Section 6 of the Mortgage) unto The Bank of New York, as Trustee
under the Mortgage, and to its successor or successors in said trust, and to
said Trustee and its successors and assigns forever, all the properties of the
Company described in the Mortgage, as heretofore supplemented and amended
(except any properties which have been released from the Lien of the Mortgage),
and all the properties specifically described in Article IV hereof.
Also all other property, real, personal and mixed, of the kind or
nature specifically mentioned in Article IV hereof or of any other kind or
nature (except any herein or in the Mortgage, as heretofore supplemented and
amended, expressly excepted and except any which may not lawfully be mortgaged
or pledged hereunder), now owned or, subject to the provisions of subsection (I)
of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase,
consolidation, merger, donation, construction, erection or in any other way) and
wheresoever situated, including (without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the foregoing or of any general
description contained in this Fifty-fourth Supplemental Indenture) all lands,
power sites, flowage rights, water rights, water locations, water
appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways,
dams, dam sites, aqueducts, and all other rights or means for appropriating,
conveying, storing and supplying water; all rights of way and roads; all plants
for the generation of electricity by steam, water and/or other power; all power
houses, gas plants, street lighting systems, standards and other equipment
incidental thereto, telephone, radio and television systems, air-conditioning
systems and equipment incidental thereto, water works, water systems, steam heat
and hot water plants, substations, lines, service and supply systems, bridges,
culverts, tracks, ice or refrigeration plants and equipment, offices, buildings
and other structures and equipment thereof; all machinery, engines, boilers,
dynamos, electric, gas and other machines, regulators, meters, transformers,
generators, motors, electrical, gas and mechanical appliances, conduits, cables,
water, steam heat, gas or other pipes, gas mains and pipes, service pipes,
fittings, valves and connections, pole and transmission lines, wires, cables,
tools,
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implements, apparatus, furniture and chattels; all franchises, consents or
permits; all lines for the transmission and distribution of electric current,
gas, steam heat or water for any purpose including towers, poles, wires, cables,
pipes, conduits, ducts and all apparatus for use in connection therewith; all
real estate, lands, easements, servitudes, licenses, permits, franchises,
privileges, rights of way and other rights in or relating to public or private
property, real or personal, or the occupancy of such property and (except as
herein or in the Mortgage, as heretofore supplemented and amended, expressly
excepted) all the right, title and interest the Company may now have or
hereafter acquire in and to any and all property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection with
any property hereinbefore or in the Mortgage, as heretofore supplemented and
amended, described.
TOGETHER WITH all and singular the tenements, hereditaments,
prescriptions, servitudes and appurtenances belonging or in anywise appertaining
to the aforementioned property or any part thereof, with the reversion and
reversions, remainder and remainders and (subject to the provisions of Section
57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income,
product and profits thereof, and all the estate, right, title, interest and
claim whatsoever, at law as well as in equity, which the Company now has or may
hereafter acquire in and to the aforementioned property and franchises and every
part and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of
subsection (I) of Section 87 of the Mortgage and to the extent permitted by law,
all the property, rights and franchises acquired by the Company (by purchase,
consolidation, merger, donation, construction, erection or in any other way)
after the date hereof, except any herein or in the Mortgage, as heretofore
supplemented and amended, expressly excepted, shall be and are as fully granted
and conveyed hereby and as fully embraced within the lien hereof and the Lien of
the Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein and conveyed hereby.
PROVIDED that the following are not and are not intended to be now or
hereafter granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over or confirmed hereunder and are hereby expressly
excepted from the lien and operation of this Fifty-fourth Supplemental Indenture
and from the Lien and operation of the Mortgage, viz.: (1) cash, shares of
stock, bonds, notes and other obligations and other securities not hereafter
specifically pledged, paid, deposited, delivered or held under the Mortgage or
covenanted so to be; (2) merchandise, equipment, apparatus, materials or
supplies held for the purpose of sale or other disposition in the usual course
of business; fuel, oil and similar materials and supplies consumable in the
operation of any of the properties of the Company; construction equipment
acquired for temporary use; all aircraft, tractors, rolling stock, trolley
coaches, buses, motor coaches, automobiles, motor trucks and other vehicles and
materials and supplies held for the purpose of repairing or replacing (in whole
or part) any of the same; all timber, minerals, mineral rights and royalties and
all Natural Gas and Oil Production Property, as defined in Section 4 of the
Mortgage; (3) bills, notes and accounts receivable, judgments, demands and
choses in action, and all contracts, leases and operating agreements not
specifically pledged under the Mortgage or covenanted so to be; (4) the last day
of the term of any lease or leasehold which may be or become subject to the Lien
of the Mortgage; (5) electric energy, gas, steam, ice and other materials or
products generated, manufactured, produced, purchased or acquired by the Company
for sale, distribution or use in the ordinary course of its business; and (6)
the Company's franchise to be a corporation; provided, however, that the
property and rights expressly excepted from the Lien and operation of the
Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by
law) cease to be so excepted in the event and as of the date that the Trustee or
a receiver or trustee shall enter
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upon and take possession of the Mortgaged and Pledged Property in the manner
provided in Article XIII of the Mortgage by reason of the occurrence of a
Default as defined in Section 65 thereof.
TO HAVE AND TO HOLD all such properties, real, personal and mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto The Bank of New York, the Trustee, and its successors and assigns
forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms,
trusts and conditions and subject to and with the same provisos and covenants as
are set forth in the Mortgage, as supplemented and amended.
AND IT IS HEREBY COVENANTED by the Company that all the terms,
conditions, provisos, covenants and provisions contained in the Mortgage, as
supplemented and amended, shall affect and apply to the property hereinbefore
described and conveyed and to the estate, rights, obligations and duties of the
Company and the Trustee and the beneficiaries of the trust with respect to said
property, and to the Trustee and its successors as Trustee of said property in
the same manner and with the same effect as if the said property had been owned
by the Company at the time of the execution of the Mortgage and had been
specifically and at length described in and conveyed to said Trustee by the
Mortgage as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustee and
its successors in said trust under the Mortgage, as follows:
ARTICLE I.
FIFTY-EIGHTH SERIES OF BONDS.
SECTION 1. There shall be a series of bonds designated "First Mortgage
Bonds, Senior Note Series A" (hereinafter sometimes referred to as the
"Fifty-eighth Series" or the "Senior Note Series A Bonds"), limited to the
aggregate principal amount of $100,000,000, each of which shall also bear the
descriptive title First Mortgage Bond, and the form thereof, which shall be
established by Resolution of the Board of Directors of the Company, shall
contain suitable provisions with respect to the matters hereinafter specified in
this Supplemental Indenture. Bonds of the Fifty-eighth Series shall be dated as
provided in Section 10 of the Mortgage; shall mature, subject to the provisions
for prior redemption hereinafter set forth, on November 15, 2006; shall be
issued as fully registered bonds in denominations of One Thousand Dollars or any
integral multiple thereof, and shall be registered in the name of the Senior
Note Trustee; and shall bear interest from November 15, 1996 or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
at the rate of 6-3/4% per annum (calculated on the basis of a 360-day year of
twelve 30-day months), payable on May 15 and November 15 of each year (each an
"Interest Payment Date"), commencing May 15, 1997, to the holders thereof of
record on the May 1 or November 1, as the case may be, next preceding such
Interest Payment Date (subject to the provisions of Section 12 of the Mortgage
concerning legal holidays and bank closings), and the principal of and interest
on, and premium or other amounts, if any, payable upon redemption of, each said
bond to be payable at the office or agency of the Company in the Borough of
Manhattan, The City of New York, New York, in such coin or currency of the
United States of America as, at the time of payment, is legal tender for public
and private debts; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the address of the person entitled
thereto as such address shall appear on the registration books of the Company.
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The Company's obligation to make payments with respect to the
principal, premium and/or interest on the Senior Note Series A Bonds shall be
fully or partially, as the case may be, satisfied and discharged to the extent
that, at the time that any such payment shall be due, the corresponding amount
of principal of, premium, if any, and/or interest then due on the Senior Notes
Due 2006 shall have been fully or partially paid, as the case may be, or there
shall have been deposited with the Senior Note Trustee pursuant to Section 501,
Section 1103, Section 1205 or Article Fourteen of the Senior Note Indenture
trust funds sufficient under the provisions of said Sections and Article to
fully or partially pay, as the case may be, the corresponding amount of
principal, premium, if any, and/or interest then due on the Senior Notes Due
2006.
SECTION 2. Upon payment of the principal of, premium, if any, and
interest due on the Senior Notes Due 2006, whether at maturity or prior to
maturity by redemption or otherwise, or upon provision for the payment thereof
having been made in accordance with Section 501 or Section 1402 of the Senior
Note Indenture, Senior Note Series A Bonds in a principal amount equal to the
principal amount of Senior Notes Due 2006 so paid or for which such provision
for payment has been made shall be deemed fully paid, satisfied and discharged
and the obligations of the Company thereunder shall be terminated and such
Senior Note Series A Bonds shall be surrendered to and cancelled by the Trustee.
From and after such date as all bonds issued under the Mortgage (other than
Senior Note First Mortgage Bonds, as such term is defined in the Senior Note
Indenture) have been retired through payment, redemption, or otherwise at,
before or after maturity thereof (the "Release Date"), the Senior Note Series A
Bonds shall be deemed fully paid, satisfied and discharged and the obligation of
the Company thereunder shall be terminated. On the Release Date, the Senior Note
Series A Bonds shall be surrendered to and cancelled by the Trustee.
SECTION 3. At the option of the registered owner, any bonds of the
Fifty-eighth Series, upon surrender thereof, for cancellation, at the office or
agency of the Company in the Borough of Manhattan, The City of New York, New
York, together with a written instrument of transfer, if required by the Company
or by the Trustee, duly executed by the registered owner or by his duly
authorized attorney, shall (subject to the provisions of Section 12 of the
Mortgage) be exchangeable for a like aggregate principal amount of bonds in
registered form of the same series of other authorized denominations without
payment of any sum other than taxes or other governmental charges.
Bonds of the Fifty-eighth Series shall be transferable (subject to the
provisions of Section 12 of the Mortgage) at said office or agency of the
Company without payment of any sum other than taxes or other governmental
charges.
ARTICLE II.
REDEMPTION OF SENIOR NOTE SERIES A BONDS
The Senior Note Series A Bonds shall be redeemed, in whole or in part,
from time to time, on the date on which a corresponding principal amount of
Senior Notes Due 2006 are redeemed as provided in the Senior Note Indenture upon
the Senior Note Trustee's notification of the Trustee of such redemption, at a
redemption price equal to the redemption price of such Senior Notes Due 2006
being so redeemed. Any such notice shall be received by the Trustee no later
than 5 days prior to any redemption date fixed for the Senior Note Series A
Bonds to be redeemed and shall specify the principal amount of such Senior Note
Series A Bonds to be redeemed, the redemption date, and the amount of accrued
interest and premium, if any, to be paid thereon. The Company shall deposit in
trust with the Trustee on the redemption date an amount of money sufficient to
pay the principal amount including accrued interest, if any, and premium, if
any, on the Senior Note Series A Bonds to be redeemed. Upon presentation to the
Trustee of any Senior Note Series A Bonds by the Senior Note Trustee for
payment, such Senior Note Series A Bonds so presented shall be redeemed and paid
in full.
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In the event the principal of all Senior Notes Due 2006 is declared due
and payable or becomes automatically due and payable pursuant to Section 602 of
the Senior Note Indenture, upon the filing with the Trustee of a written demand
for the acceleration of the payment of principal of all Senior Note Series A
Bonds, the payment of principal on all Senior Note Series A Bonds shall become
immediately due and payable and the Trustee shall provide to the Senior Note
Trustee an irrevocable, valid and unconditional notice of the acceleeration of
all Senior Note Series A Bonds.
Redemption of the Senior Note Series A Bonds shall be effected, without
further notice by the Company to the Trustee, by the payment by the Company of
the applicable redemption price specified in this Article II at the place
specified for payment of principal of and interest on such bonds.
The Senior Note Series A Bonds will not be subject to prepayment or
redemption prior to maturity except as provided herein, notwithstanding the
provisions of Section 39 or Section 64 of the Mortgage, or with "Proceeds of
Released Property," as defined in the Mortgage.
The Senior Note Series A Bonds will not be subject to any sinking fund.
The Company covenants and agrees that, prior to Release Date, it will
not take any action (except as required by this Article II hereof) that would
cause the outstanding principal amount of the Senior Note Series A Bonds to be
less than the then outstanding principal amount of the Senior Notes Due 2006.
ARTICLE III.
REPLACEMENT FUND PROVISIONS -- OTHER RELATED PROVISIONS
OF THE MORTGAGE -- DIVIDEND COVENANT -- RECORD DATES --
AUTHENTICATING AGENT.
SECTION 4. The Company covenants that the provisions of Section 39 of
the Mortgage, which were to remain in effect so long as any bonds of the First
Series remained Outstanding, shall remain in full force and effect so long as
any bonds of the Thirty-fourth, Forty-third, Forty-fourth, Forty-fifth, Forth-
sixth, Forty-seventh, Forty-eighth, Forty-ninth, Fiftieth, Fifty-first, Fifty-
second, Fifty-third, Fifty-fourth, Fifty-fifth, Fifty-sixth , Fifty-seventh, or
Fifty-eighth Series are Outstanding.
Clause (d) of subsection (II) of Section 4 of the Mortgage, as
heretofore amended, clause (6) and clause (e) of Section 5 of the Mortgage, as
heretofore amended, and Section 29 of the Mortgage, as heretofore amended, are
hereby further amended by inserting therein the words "and Fifty-eighth Series"
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after the words "bonds of the First Series and Second Series and Third Series
and Fourth Series and Fifth Series and Sixth Series and Seventh Series and
Eighth Series and Ninth Series and Tenth Series and Eleventh Series and Twelfth
Series and Thirteenth Series and Fourteenth Series and Fifteenth Series and
Sixteenth Series and Seventeenth Series and Eighteenth Series and Nineteenth
Series and Twentieth Series and Twenty-first Series and Twenty-second Series and
Twenty-third Series and Twenty-fourth Series and Twenty- fifth Series and
Twenty-sixth Series and Twenty-seventh Series and Twenty- eighth Series and
Twenty-ninth Series and Thirtieth Series and Thirty-first Series and
Thirty-second Series and Thirty-third Series and Thirty-fourth Series and
Thirty-fifth Series and Thirty-sixth Series and Thirty-seventh Series and
Thirty-eighth Series and Thirty-ninth Series and Fortieth Series and Forty-first
Series and Forty-second Series and Forty-third Series and Forty-fourth Series
and Forty-fifth Series and Forty-sixth Series and Forty- seventh Series and
Forty-eighth Series and Forty-ninth Series and Fiftieth Series and Fifty-first
Series and Fifty-second Series and Fifty-third Series and Fifty-fourth Series
and Fifty-fifth Series and Fifty-sixth Series and Fifty-seventh Series" each
time such words occur therein.
Clause (e) of subsection (II) of Section 4 of the Mortgage, as
heretofore amended, is hereby further amended by the insertion therein after the
words "and Fifty-seventh" the words "and Fifty-eighth."
The last paragraph of Section 12 of the Mortgage, as heretofore
amended, the last paragraph of Section 17 of the Mortgage, as heretofore
amended, and the last paragraph of Section 110 of the Mortgage, as heretofore
amended, are hereby amended by inserting therein the words "or the Fifty-eighth
Series" after the words "Fifty-seventh Series" each time such words occur
therein..
ARTICLE IV.
MISCELLANEOUS PROVISIONS.
SECTION 5. The terms defined in the Mortgage, as supplemented and
amended, shall, for all purposes of this Fifty-fourth Supplemental Indenture,
have the meanings specified therein, except that the term "Mortgage" shall mean
only the original Mortgage and Deed of Trust, dated as of July 1, 1946; the term
"Mortgage, as heretofore supplemented and amended" shall mean the Mortgage, as
supplemented and amended by the First through Fifty-third Supplemental
Indentures hereinabove referred to; and the term "Mortgage, as supplemented and
amended," shall mean the Mortgage, as supplemented and amended by the First
through Fifty-third Supplemental Indentures hereinabove referred to and as
supplemented and amended by this Fifty-fourth Supplemental Indenture and any
future supplemental indentures.
SECTION 6. The Trustee hereby accepts the trusts herein declared,
provided, created, supplemented or amended and agrees to perform the same upon
the terms and conditions herein and in the Mortgage, as heretofore supplemented
and amended, set forth and upon the following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Fifty-fourth Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made by the Company solely. In general, each and every term and
condition contained in Article XVII of the Mortgage shall apply to and form part
of this Fifty-fourth Supplemental Indenture with the same force and effect as if
the same were herein set forth in full with such omissions, variations and
insertions, if any, as may be appropriate to make the same conform to the
provisions of this Fifty-fourth Supplemental Indenture.
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SECTION 7. Whenever in this Fifty-fourth Supplemental Indenture either
of the parties hereto is named or referred to, this shall, subject to the
provisions of Articles XVI and XVII of the Mortgage, be deemed to include the
successors and assigns of such party, and all the covenants and agreements in
this Fifty-fourth Supplemental Indenture contained by or on behalf of the
Company or by or on behalf of the Trustee shall, subject as aforesaid, bind and
inure to the respective benefits of the respective successors and assigns of
such parties, whether so expressed or not.
SECTION 8. Nothing in this Fifty-fourth Supplemental Indenture,
expressed or implied, is intended or shall be construed to confer upon, or to
give to, any person, firm or corporation, other than the parties hereto and the
holders of the bonds Outstanding under the Mortgage, any right, remedy or claim
under or by reason of this Fifty-fourth Supplemental Indenture or any covenant,
condition, stipulation, promise or agreement hereof, and all the covenants,
conditions, stipulations, promises and agreements in this Fifty-fourth
Supplemental Indenture contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of the holders of the bonds
Outstanding under the Mortgage.
SECTION 9. This Fifty-fourth Supplemental Indenture may be executed
simultaneously in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
ARTICLE V.
SPECIFIC DESCRIPTION OF PROPERTY.
SECTION 10. CERTAIN REAL PROPERTY LOCATED IN:
MARICOPA COUNTY
Arrowhead
THAT CERTAIN PARCEL OF LAND situated in the Southeast quarter of Section 23,
Township 4 north, Range 1 East of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona, being more particularly described as follows:
COMMENCING at the D.L.M. Brass Cap that marks the South Quarter corner of said
Section 23:
THENCE North 89 degrees, 58 minutes, 00 seconds, East, along the South line of
said Section 23, a distance of 490.00 feet:
THENCE North 0 degrees, 02 minutes, 29 seconds, West a distance of 70.00 feet,
to the Southwesterly corner of said parcel of land and the TRUE POINT OF
BEGINNING.
THENCE continuing North 0 degrees, 02 minutes, 29 seconds West, a distance of
250.00 feet:
THENCE North 89 degrees, 58 minutes, 00 seconds, East a distance of 250.00 feet:
THENCE South 0 degrees, 02 minutes, 29 seconds, East a distance of 250.00 feet:
THENCE South 89 degrees, 58 minutes, 00 seconds, West a distance of 250.00 feet,
and to the TRUE POINT OF BEGINNING
Covenant Regarding Right Of First Refusal
Grantee agrees that Grantor shall have a right of first refusal
for the subject property should Grantee ever decide it will not need the
property for its stated purpose for the location of an electrical
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distribution substation: Provided however, that the term of this right of first
refusal shall be effective for a period of five (5) years from the date of
recordation of this deed (the date of close of escrow), all as set forth in that
certain addendum to escrow instructions dated October 13, 1994, Lawyers Title of
Arizona, Inc., Escrow No. 352361, executed by Grantor and Grantee as Seller and
Buyer respectively.
NAVAJO COUNTY
Cholla Generating Station - Met Tower
PARCEL ONE:
- -----------
THAT CERTAIN PARCEL OF LAND situated in the Northwest quarter of Section 16,
Township 18 North, Range 19 East of the Gila and Salt River Base and Meridian,
Navajo County, Arizona, being more particularly described as follows:
COMMENCING at the 1 inch iron pipe that marks the Northeast corner of said
Section 16, from whence the Southeast corner of said Section 16 bears south 00
degrees 11 minutes 36 seconds East, 5302.45 feet distant.
Thence South 56 degrees 53 minutes 48 seconds West a distance of
3249.26 feet to a 3/4 inch Rebar tagged L.S. 16292 and the TRUE POINT OF
BEGINNING.
Thence North 02 degrees 36 minutes 10 seconds East a distance of 150
feet to a 3/4 inch Rebar tagged L.S. 16292.
Thence North 87 degrees 23 minutes 50 seconds West a distance of 60
feet to a 3/4 inch Rebar tagged L.S. 16292.
Thence South 02 degrees 36 minutes 10 seconds West a distance of 150
feet to a 3/4 inch Rebar tagged L.S. 16292.
Thence South 87 degrees 23 minutes 50 seconds East a distance of 60
feet to a 3/4 inch Rebar tagged L.S. 16292 and the TRUE POINT OF BEGINNING.
PARCEL TWO:
- -----------
A 25 foot wide ingress/egress, and public utility easement, said easement being
more particularly described as lying 12.5 feet on each side of the following
described centerline.
COMMENCING at the Southeast corner of the above described parcel of land a 3/4
inch Rebar tagged L.S. 16292.
Thence North 02 degrees 36 minutes 10 seconds East along the east line
of said parcel a distance of 31.5 feet.
Thence South 87 degrees 23 minutes 50 seconds East a distance of 12.5
feet to the TRUE POINT OF BEGINNING.
Thence South 02 degrees 36 minutes 10 seconds West a distance of 31
feet.
Thence South 01 degrees 59 minutes 33 seconds East a distance of 255.46
feet more or less to a POINT OF TERMINATION on the North line of Fourth North
Avenue.
PARCEL THREE:
- -------------
A six (6) foot wide electric easement lying 3 feet on each side of the following
described centerline.
13
<PAGE>
COMMENCING at the Southeast corner of said parcel being a 3/4 inch Rebar tagged
L.S. 16292.
Thence North 02 degrees 36 minutes 10 seconds East along the east line of said
parcel a distance of 31.5 feet.
Thence South 87 degrees 23 minutes 50 seconds East a distance of 3 feet
to the POINT OF BEGINNING.
Thence North 02 degrees 36 minutes 10 seconds East a distance of 43.5
feet to the POINT OF TERMINATION.
Cholla Generating Station - Common Facilities
That certain parcel of land situated in the Southwest quarter of Section 30,
Township 18 North, Range 20 East of the Gila and Salt River Base and Meridian,
Navajo County, Arizona, being more particularly described as follows:
COMMENCING at the 2 1/2 inch capped pipe that marks the Southwest corner of said
Section 30, from whence the 2 1/2 inch capped pipe that marks the Northwest
corner of said Section 30 bears North 0 degrees 35 minutes 35 seconds West
(Basis of Bearings) 5328.02 feet distant;
thence North 0 degrees 35 minutes 35 seconds West along the West line
of said Section 30 a distance of 2066.33 feet to a point on the Southerly right
of way line of Interstate 40:
thence South 49 degrees 52 minutes 46 seconds East along said Southerly
right of way line of Interstate 40 a distance of 434.23 to a 5/8 inch rebar and
the TRUE POINT OF BEGINNING:
thence South 49 degrees 52 minutes 46 seconds East along said Southerly
right of way line of Interstate 40 a distance of 984.02 feet to a 5/8 inch
rebar;
thence south 45 degrees 19 minutes 07 seconds West a distance of 360.77
feet to a 5/8 inch rebar;
thence North 42 degrees 09 minutes 18 seconds West a distance of
1032.15 feet to a 5/8 inch rebar;
thence North 58 degrees 04 minutes 11 seconds East a distance of 231.84
feet to a 5/8 inch rebar and the TRUE POINT OF BEGINNING.
Together with a roadway easement for ingress and egress 15 feet in width, 7.5
feet on each side of the following described centerline;
COMMENCING at the Southwest corner of said Section 30;
thence North 88 degrees 27 minutes 16 seconds East along the South line
of said Section 30 a distance of 2066.41 feet to the Arizona Department of
Transportation brass cap that marks a point 290.28 feet right of I-40 Eastbound
station 1356+70;
thence North 02 degrees 52 minutes West a distance of 55.5 feet to a
point on the Southerly right of way line of Interstate 40 and the TRUE POINT OF
BEGINNING:;
thence North 86 degrees 55 minutes 35 seconds West a distance of 779.24
feet;
thence North 10 degrees 42 minutes 02 seconds West a distance of 374.77
feet;
thence North 52 degrees 06 minutes 27 seconds West a distance of 237.04
feet;
thence North 59 degrees 34 minutes 00 seconds West a distance of 145.25
feet;
thence North 45 degrees 21 minutes 58 seconds West a distance of 180.23
feet;
thence North 09 degrees 38 minutes 02 seconds East a distance of 57.22
feet to a POINT OF TERMINATION on the Southerly line of the previously described
property and from whence the Southeasterly corner of said property, a 5/8 inch
rebar bears South 42 degrees 09 minutes 18 seconds East a distance of 33.41
feet;
14
<PAGE>
And together with an easement for drainage purposes 30 feet in width, being more
particularly described as follows:
COMMENCING at the Northwesterly property corner of the previously described
parcel, a 5/8 inch rebar and the TRUE POINT OF BEGINNING;
thence North 49 degrees 52 minutes 46 seconds West along the Southerly
right of way line of Interstate 40 a distance of 137.5 feet;
thence South 40 degrees 07 minutes 14 seconds West a distance of 30.0
feet;
thence South 49 degrees 52 minutes 46 seconds East a distance of 127.78
feet;
thence North 58 degrees 04 minutes 11 seconds East a distance of 31.53
feet to the TRUE POINT OF BEGINNING.
EXCEPT all coal and other minerals as reserved in Patent recorded in Docket 207,
Page 403.
COCONINO COUNTY
Prescott Service Center A
That portion of Sheldon Street of the Original Townsite of Prescott as recorded
in Book 4 of Maps, and Plats, Page 22 on file at the Office of the Yavapai
County Recorder, Yavapai County, Arizona, more particularly described as
follows:
Commencing at the intersection of the Westerly right-of-way of Granite Street
and the Southerly right-of-way of Sheldon Street, said intersection point also
being the Northeast corner of Lot 1, Block "A" of said original Townsite;
Thence West (assumed bearing) along the Southerly right-of-way of said Sheldon
Street, 209.12 feet to the TRUE POINT OF BEGINNING of this description;
Thence continuing West along the said Southerly right-of-way of Sheldon Street,
124.12 feet to the intersection of the said Southerly right-of-way of Sheldon
Street and the Easterly right-of-way of McCormick Street in said block "A";
Thence North, 66.25 feet to the intersection of the Northerly right-of-way of
said Sheldon Street and the Northerly prolongation of the Easterly right-of-way
of McCormick Street;
Thence East along the Northerly right-of-way of said Sheldon Street, 124.12
feet;
Thence South, 66.25 feet to the TRUE POINT OF BEGINNING.
Prescott Service Center B
That part of Lot 7, Section 33, Township 14 North, Range 2 West of the Gila and
Salt River Base and Meridian, Yavapai County, Arizona, described as follows:
COMMENCING at that certain point from whence the one quarter corner of said
Section 33 and Section 34 bears North 60' 11" East a distance of 2571.65 feet;
thence North 0(degree) 46' 43" East, a distance of 130 feet to a point;
thence South 89(degree) 13' 17" East, a distance of 180 feet to a point;
thence North 0(degree) 46' 43" East, a distance of 75 feet to a point;
thence South 89(degree) 13'17" East, a distance of 160 feet to a point;
thence North 0(degree) 46' 43" East a distance of 150 feet to the TRUE POINT OF
BEGINNING;
thence North 56(degree) 00' East 48.2 feet to a corner of the property described
in instrument recorded in Book 158 of Deeds, page 389, records of Yavapai
County, Arizona;
15
<PAGE>
thence along the Westerly boundary line of property described in instrument
recorded in Book 158 of Deeds, page 389, records of Yavapai County, Arizona,
over the following courses:
East 13.0 feet to a point;
North 5(degree) 00' East 32.0 feet to a point;
North 85(degree) 00' West 16.0 feet to a point;
North 4(degree) 01' East 25.7 feet to a point;
North 59(degree) 14' East to the point of intersection
with the Southerly boundary line or the Easterly extension thereof of Bashford
Addition First Subdivision, accord to Book 2 of Maps, page 94, records of
Yavapai County, Arizona;
thence Westerly along the said Southerly line and the Easterly extension thereof
of said Bashford Addition First Subdivision to the point of intersection with
the Easterly line of property described in instrument recorded in Book 19 of
Deeds, page 575, records of Yavapai County, Arizona;
thence Southerly along the said Easterly line of property described in
instrument recorded in Book 19 of Deeds, page 575, records of Yavapai County,
Arizona, to the point of intersection with the Northerly boundary line of
property described in Parcel 3 of instrument recorded in Book 193 of Deeds, page
46, records of Yavapai County, Arizona;
thence North 89(degree) 13' 17" West along said Northerly boundary line a
distance of 325 feet;
thence North 0(degree) 46' 43" East, a distance of 20 feet to a point;
thence south 89(degree) 13' 17" East, a distance of 160 feet to the TRUE POINT
OF BEGINNING.
Valle Sub
Lot 422, GRAND CANYON SUBDIVISION UNIT TEN, according to Case 2 MAP 162, records
of Coconino County, Arizona
EXCEPT oil, gas and minerals as reserved in Deed recorded in Docket 1741, page
277, records of Coconino county, Arizona.
SECTION 11. THE ELECTRIC SUBSTATIONS OF THE COMPANY, including all
buildings, structures, towers, poles, all equipment, appliances and devices for
transforming, converting and distributing electric energy, and all land owned by
the Company upon which the same are situated, and all of the Company's
easements, rights of way, rights, machinery, equipment, appliances, devices,
licenses and supplies forming a part of said substations, or any of them,
including additions and improvements to any of the foregoing, or used or enjoyed
or capable of being used or enjoyed in conjunction with any thereof, including,
without limitation, the following substations:
16
<PAGE>
Name Location County and State
---- -------- ----------------
Wild Burro New River Maricopa County, Arizona
San Luis Yuma Yuma County, Arizona
Bonneybrook Florence Pinal County, Arizona
Coyote Springs Prescott Valley Yavapai County, Arizona
Litchfield Litchfield Park Maricopa County, Arizona
Bald Mountain Prescott Valley Yavapai County, Arizona
Woody Mountain Flagstaff Coconino County, Arizona
Thompson Peak Scottsdale Maricopa County, Arizona
Desert Ridge Scottsdale Maricopa County, Arizona
Yavapai Chino Valley Yavapai County, Arizona
Shea Scottsdale Maricopa County, Arizona
SECTION 12. Additions, extensions and improvements to THE ELECTRIC
TRANSMISSION SYSTEMS of the Company including, among other things, 8.5 miles of
69kV from Bald Mountain to Dewey and 2.0 miles of 69kV from Bell to Skunk Creek
Tie.
SECTION 13. Additions, extensions and improvements to THE ELECTRIC
DISTRIBUTION SYSTEMS of the Company, including the construction of additional
facilities throughout the Company's service area, as well as extension of
residential and downtown underground distribution facilities, including
associated distribution equipment such as voltage regulators, capacitor banks,
sectionalizing equipment, transformers, street lighting systems, meters and
services, including reconstruction and improvements to provide efficient Company
operation.
17
<PAGE>
IN WITNESS WHEREOF, ARIZONA PUBLIC SERVICE COMPANY, party hereto of the
first part, has caused its corporate name to be hereunto affixed, and this
instrument to be signed and sealed by its President, one of its Vice Presidents,
or its Treasurer, and its corporate seal to be attested by its Secretary or one
of its Assistant Secretaries or Associate Secretaries for and in its behalf, in
the City of Phoenix, Arizona, and THE BANK OF NEW YORK, party hereto of the
second part, has caused its corporate name to be hereunto affixed, and this
instrument to be signed and sealed by one of its Vice Presidents or Assistant
Vice Presidents and its corporate seal to be attested by one of its Assistant
Vice Presidents or Assistant Treasurers for and in its behalf, in the City of
New York, New York, all as of the 15th day of November, 1996.
ARIZONA PUBLIC SERVICE COMPANY
Nancy E. Newquist
------------------------------
Treasurer
Attest:
Betsy A. Pregulman
- ---------------------------------------
Associate Secretary
Executed, sealed and delivered by
ARIZONA PUBLIC SERVICE COMPANY
in the presence of:
Michael P. Hennigan
- ---------------------------------------
Brenda Kucharek
- ---------------------------------------
[SEAL]
THE BANK OF NEW YORK, As Trustee
Walter N. Gitlin
------------------------------
Vice President
Attest:
Robert E. Patterson
- ---------------------------------------
Assistant Vice President
Executed, sealed and delivered by
THE BANK OF NEW YORK in the
presence of:
Jocelyn Lynch
- ---------------------------------------
Kathleen Boyle
- ---------------------------------------
[SEAL]
18
<PAGE>
STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
On this 21st day of November, 1996, before me, Maria R. Marrs, the
undersigned officer, personally appeared Nancy E. Newquist, who acknowledged
herself to be the Treasurer of ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation, and that she, as such Treasurer being authorized so to do, executed
the foregoing instrument for the purposes therein contained, by signing the name
of the corporation by herself as Treasurer.
IN WITNESS WHEREOF, I have hereunto set my hand and seal.
Maria R. Marrs
--------------------------------------
Notary Public
My Commission Expires July 21, 1998
-----------------
[SEAL]
STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
On this 21st day of November, 1996, before me, Maria R. Marrs, the
undersigned officer, personally came Nancy E. Newquist, to me known, who being
by me duly sworn, did depose and say that she resides in Phoenix, Arizona, that
she is the Treasurer of ARIZONA PUBLIC SERVICE COMPANY, the corporation
described in and which executed the above instrument; that she knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that she signed her name thereto by like order.
IN WITNESS WHEREOF, I have hereunto set my hand and seal.
Maria R. Marrs
--------------------------------------
Notary Public
My Commission Expires July 21, 1998
-----------------
[SEAL]
STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
This instrument was acknowledged before me on November 21, 1996 by
Nancy E. Newquist and Betsy A. Pregulman as Treasurer and Associate Secretary,
respectively, of ARIZONA PUBLIC SERVICE COMPANY.
Maria R. Marrs
--------------------------------------
Notary Public
My Commission Expires July 21, 1998
-----------------
[SEAL]
19
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 20th day of November, 1996, before me, William J. Cassels,
Notary Public in and for the County and State aforesaid, residing therein, duly
commissioned and sworn, personally appeared Walter N. Gitlin, known to me to be
a Vice President of THE BANK OF NEW YORK, New York banking corporation, which
executed the within instrument, and Robert E. Patterson known to me to be an
Assistant Vice President of The Bank of New York, who being by me duly sworn,
acknowledged before me that the seal affixed to said instrument is the corporate
seal of The Bank of New York, that they, being authorized so to do, executed the
within instrument on behalf of The Bank of New York by authority of its board of
directors, and that said instrument is the free act and deed of The Bank of New
York for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
William J. Cassels
--------------------------------------
Notary Public
My Commission Expires May 16, 1998
-----------------
[SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me on November 20, 1996 by
Walter N. Gitlin and Robert E. Patterson as Vice President and Assistant Vice
President, respectively, of THE BANK OF NEW YORK.
William J. Cassels
--------------------------------------
Notary Public
My Commission Expires May 16, 1998
-----------------
[SEAL]
20
EXHIBIT 4.2
Number A-1 $100,000,000
APS
ARIZONA PUBLIC SERVICE COMPANY
FIRST MORTGAGE BOND,
SENIOR NOTE SERIES A
Arizona Public Service Company, a corporation of the State of Arizona
(hereinafter called the Company), for value received, hereby promises to pay to
THE BANK OF NEW YORK, as Trustee, or registered assigns, the principal sum of
One Hundred Million Dollars on November 15, 2006, and to pay interest thereon
from November 15, 1996 or from the most recent Interest Payment Date (as defined
below) with respect to which interest has been paid or duly provided for,
semiannually on May 15 and November 15 in each year (each an "Interest Payment
Date"), commencing May 15, 1997, at the rate of 6 3/4% per annum (calculated on
the basis of a 360-day year of twelve 30-day months) until the principal hereof
is paid or made available for payment to the holder of record of this bond on
the May 1 or November 1, as the case may be, next preceding such Interest
Payment Date, unless such day is a legal holiday or a day on which banking
institutions in The City of New York are authorized to remain closed, in which
case on the next preceding day which shall not be a legal holiday or day on
which such institutions are authorized by law to remain closed. Payment of the
principal of (and premium, if any) and interest on this bond will be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, New York, in such coin or currency of the
United States of America as, at the time of payment is legal tender for payment
of public and private debts, provided, however, that payment of interest may be
made at the option of the Company by check mailed to the address of the person
entitled thereto as such address shall appear on the registration books of the
Company.
This bond shall not become obligatory until The Bank of New York, the
Trustee under the Mortgage, or its successor thereunder, shall have signed the
form of authentication certificate endorsed hereon.
IN WITNESS WHEREOF, Arizona Public Service Company has caused this bond
to be signed in its corporate name by its President or one of its Vice
Presidents and its corporate seal to be impressed or imprinted hereon and
attested by its Secretary or one of its Assistant Secretaries.
DATED: November 22, 1996
ARIZONA PUBLIC SERVICE COMPANY
____________________________________
Executive Vice President,
and Chief Financial Officer
ATTEST:
____________________________________
Secretary
TRUSTEE'S AUTHENTICATION CERTIFICATE
This bond is one of the bonds, of the series herein designated,
described or provided for in the within mentioned Mortgage.
THE BANK OF NEW YORK, AS TRUSTEE
By ________________________________
Authorized Signatory
<PAGE>
ARIZONA PUBLIC SERVICE COMPANY
First Mortgage Bond, Senior Note Series A
This bond is one of an issue of bonds of the Company issuable in series
and is one of a series known as its First Mortgage Bonds, Senior Note Series A,
all bonds of all series issued and to be issued under and equally secured
(except insofar as any sinking or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular series) by a Mortgage and Deed of Trust (herein,
together with any indenture supplemental thereto, including the supplemental
indentures dated as of December 1, 1947, April 1, 1949, February 1, 1950,
December 1, 1950, February 1, 1953, November 1, 1953, March 1, 1954, October 1,
1957, March 1, 1959, November 1, 1961, June 1, 1962, December 1, 1962, September
1, 1963, September 1, 1967, April 1, 1970, March 15, 1972, April 1, 1974,
February 15, 1975, June 1, 1975, November 15, 1975, April 15, 1977, January 15,
1978, March 1, 1979, October 15, 1979, May 15, 1980, February 2, 1982, April 15,
1982, July 1, 1983, October 15, 1983, June 15, 1984, January 15, 1985, May 1,
1985, June 1, 1985, November 1, 1985, January 15, 1986, March 1, 1986, May 1,
1986, February 1, 1987, June 1, 1987, November 15, 1987, April 1, 1989, February
15, 1990, May 15, 1990, April 15, 1991, December 15, 1991, January 15, 1992,
March 1, 1992, June 15, 1992, February 1, 1993, August 1, 1993, August 1, 1993,
September 15, 1993, March 1, 1994, and November 15, 1996, called the Mortgage)
dated as of July 1, 1946, executed by the Company to The Bank of New York, as
Trustee. Reference is made to the Mortgage for a description of the property
mortgaged and pledged, the nature and extent of the security, the rights of the
holders of the bonds and of the Trustee in respect thereof, the duties and
immunities of the Trustee, the terms and conditions upon which the bonds are and
are to be secured, and the circumstances under which additional bonds may be
issued. With the consent of the Company and to the extent permitted by and as
provided in the Mortgage, the rights and obligations of the Company and/or the
rights of the holders of the bonds and/or the terms and provisions of the
Mortgage may be modified or altered by affirmative vote of the holders of at
least seventy per centum (70%) in principal amount of the bonds then outstanding
under the Mortgage and, if the rights of the holders of one or more, but less
than all, series of bonds then outstanding are to be affected, then also by
affirmative vote of the holders of at least seventy per centum (70%) in
principal amount of the bonds then outstanding of each series of bonds so to be
affected (excluding in any case bonds disqualified from voting by reason of the
Company's interest therein as provided in the Mortgage); provided that, without
the consent of the holder hereof, no such modification or alteration shall,
among other things, impair or affect the right of the holder to receive payment
of the principal of and interest on this bond and other amounts, if any, payable
upon the redemption hereof on or after the respective due dates expressed
herein, or permit the creation of any lien equal or prior to the lien of the
Mortgage or deprive the holder of the benefit of a lien on the mortgaged and
pledged property.
The Company has issued One Hundred Million Dollars ($100,000,000) in
aggregate principal amount of its 6-3/4% Senior Notes Due 2006 (the "Senior
Notes Due 2006") pursuant to the provisions of the Indenture dated as of
November 15, 1996 (the "Senior Note Indenture"), between the Company and The
Bank of New York, as trustee (said trustee or any successor trustee under the
Senior Note Indenture being hereinafter referred to as the "Senior Note
Trustee"), as supplemented by the First Supplemental Indenture, dated as of
November 15, 1996, between the Company and the Senior Note Trustee (the "First
Supplemental Indenture").
The Company has issued the bonds of this series to secure the Company's
obligation to pay principal, premium, if any, and interest on the Senior Notes
Due 2006 prior to the Release Date (as hereinafter defined).
The Company's obligation to make payments with respect to the
principal, premium and/or interest on the bonds of this series shall be fully or
partially, as the case may be, satisfied and discharged to the extent that, at
the time that any such payment shall be due, the corresponding amount of
principal of, premium, if any, and/or interest then due on the Senior Notes Due
2006 shall have been fully or partially paid, as the case may be, or there shall
have been deposited with the Senior Note Trustee pursuant to Section 501,
Section 1103, Section 1205 or Article Fourteen of the Senior Note Indenture
trust funds sufficient under the provisions of said Sections and Article to
fully or partially pay, as the case may be, the corresponding amount of
principal, premium, if any, and/or interest then due on the Senior Notes Due
2006.
Upon payment of the principal of, premium, if any, and interest due on
the Senior Notes Due 2006, whether at maturity or prior to maturity by
redemption or otherwise, or upon provision for the payment thereof having been
made in accordance with Section 501 or Section 1402 of the Senior Note
Indenture, bonds of this series in a principal amount equal to the principal
amount of Senior Notes Due 2006 so paid or for which such
2
<PAGE>
provision for payment has been made shall be deemed fully paid, satisfied and
discharged and the obligations of the Company thereunder shall be terminated and
such bonds of this series shall be surrendered to and cancelled by the Trustee.
From and after such date as all bonds issued under the Mortgage (other than
Senior Note First Mortgage Bonds, as such term is defined in the Senior Note
Indenture) have been retired through payment, redemption, or otherwise at,
before or after maturity thereof (the "Release Date"), the bonds of this series
shall be deemed fully paid, satisfied and discharged and the obligation of the
Company hereunder shall be terminated. On the Release Date, the bonds of this
series shall be surrendered to and cancelled by the Trustee.
This bond is transferable as prescribed in the Mortgage by the
registered owner hereof in person, or by his duly authorized attorney, at the
office or agency of the Company or at the office or agency of the Company in the
Borough of Manhattan, The City of New York, New York, upon surrender and
cancellation of this bond, and thereupon a new fully registered bond of the same
series for a like principal amount will be issued to the transferee in exchange
herefor as provided in the Mortgage.
In the manner prescribed in the Mortgage, bonds of this series, upon
surrender thereof, for cancellation, at the office or agency of the Company in
the Borough of Manhattan, The City of New York, New York, together with a
written instrument of transfer, if required by the Company or by the Trustee,
duly executed by the registered owner or by his duly authorized attorney, are
exchangeable for a like aggregate principal amount of bonds in registered form
of the same series of other authorized denominations. Bonds of this series are
issuable in denominations of One Thousand Dollars or any integral multiples
thereof.
No service charge shall be made for any such transfer or exchange, but
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
The bonds of this series shall be redeemed, in whole or in part, from
time to time, on the date on which a corresponding principal amount of Senior
Notes Due 2006 are redeemed, as provided in the Senior Note Indenture and the
First Supplemental Indenture upon the Senior Note Trustee's notification of the
Trustee of such redemption, at a redemption price equal to the redemption price
of such Senior Notes Due 2006 being so redeemed . Any such notice shall be
received by the Trustee no later than 5 days prior to any redemption date fixed
for the bonds of this series to be redeemed and shall specify the principal
amount of such bonds of this series to be redeemed, the redemption date, and the
amount of accrued interest and premium, if any, to be paid thereon. The Company
shall deposit in trust with the Trustee on the redemption date an amount of
money sufficient to pay the principal amount including accrued interest, if any,
and premium, if any, on the bonds of this series to be redeemed. Upon
presentation to the Trustee of any bonds of this series by the Senior Note
Trustee for payment, such bonds of this series so presented shall be redeemed
and paid in full.
In the event the principal of all Senior Notes Due 2006 is declared due
and payable or becomes automatically due and payable pursuant to Section 602 of
the Senior Note Indenture, upon the filing with the Trustee of a written demand
for the acceleration of the payment of principal of all the bonds, such bonds
shall become immediately due and payable.
Redemption of the bonds of this series shall be effected, without
further notice by the Company to the Trustee, by the payment by the Company of
the applicable redemption price specified in this bond at the place specified
for payment of principal of and interest on such bonds.
3
<PAGE>
The Senior Note Series A Bonds will not be subject to prepayment or
redemption prior to maturity except as provided herein, notwithstanding the
provisions of Section 39 or Section 64 of the Mortgage, or with "Proceeds of
Released Property," as defined in the Mortgage.
The bonds of this series will not be subject to any sinking fund.
The Company covenants and agrees that, prior to Release Date, it will
not take any action (except as described in this bond) that would cause the
outstanding principal amount of the bonds of this series to be less than the
then outstanding principal amount of the Senior Notes Due 2006.
The Company and the Trustee may deem and treat the person in whose name
this bond is registered as the absolute owner hereof for the purpose of
receiving payment and for all other purposes, and neither the Company nor the
Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
interest on this bond against any incorporator or any past, present or future
subscriber to the capital stock, stockholder, officer or director of the Company
or of any predecessor or successor corporation, as such, either directly or
through the Company or any predecessor or successor corporation, under any rule
of law, statute or constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers, stockholders,
officers and directors being released by the holder or owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Mortgage.
4
Exhibit 4.5
ARIZONA PUBLIC SERVICE COMPANY
TO
THE BANK OF NEW YORK
Trustee
--------------
Indenture
Dated as of November 15, 1996
--------------
(For Senior Notes)
<PAGE>
..............................................................
Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
ss. 310 (a) (1) ......................................... 709
(a) (2) ......................................... 709
(a) (3) ......................................... Not Applicable
(a) (4) ......................................... Not Applicable
(b) ......................................... 708
710
ss. 311 (a) ......................................... 713
(b) ......................................... 713
ss. 312 (a) ......................................... 801
802
(b) ......................................... 802
(c) ......................................... 802
ss. 313 (a) ......................................... 803
(b) ......................................... 803
(c) ......................................... 803
(d) ......................................... 803
ss. 314 (a) ......................................... 804
(a) (4) ......................................... 101
1104
(b) ......................................... 1105
(c) (1) ......................................... 102
(c) (2) ......................................... 102
(c) (3) ......................................... Not Applicable
(d) ......................................... 102
......................................... 404
(e) ......................................... 102
ss. 315 (a) ......................................... 701
(b) ......................................... 702
(c) ......................................... 701
(d) ......................................... 701
(e) ......................................... 614
ss. 316 (a) ......................................... 101
(a) (1)(A) ......................................... 602
612
(a) (1)(B) ......................................... 613
(a) (2) ......................................... Not Applicable
(b) ......................................... 608
(c) ......................................... 104
ss. 317 (a) (1) ......................................... 603
(a) (2) ......................................... 604
(b) ......................................... 1103
ss. 318 (a) ......................................... 107
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
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PAGE
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PARTIES
RECITALS OF THE COMPANY
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<TABLE>
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SECTION 101. Definitions:
Act................................................................................. 2
Affiliate........................................................................... 2
Authenticating Agent................................................................ 2
Board of Directors.................................................................. 2
Board Resolution.................................................................... 2
Business Day........................................................................ 2
Commission.......................................................................... 2
Company............................................................................. 2
Company Request; Company Order...................................................... 2
Corporate Trust Office.............................................................. 2
Corporation......................................................................... 2
Covenant Defeasance................................................................. 3
Defaulted Interest.................................................................. 3
Defeasance.......................................................................... 3
Depositary.......................................................................... 3
Event of Default.................................................................... 3
Exchange Act........................................................................ 3
Expiration Date..................................................................... 3
Expert.............................................................................. 3
First Mortgage..................................................................... 3
First Mortgage Bonds................................................................ 3
Global Note......................................................................... 3
Holder.............................................................................. 3
Indenture........................................................................... 3
Interest............................................................................ 3
Interest Payment Date............................................................... 3
Investment Company Act.............................................................. 4
Maturity............................................................................ 4
Mortgage Trustee.................................................................... 4
Notes............................................................................... 4
Note Register; Note Registrar....................................................... 4
Notice of Default................................................................... 4
Officers' Certificate............................................................... 4
Opinion of Counsel.................................................................. 4
Original Issue Discount Note........................................................ 4
Outstanding......................................................................... 4
Paying Agent........................................................................ 5
Person.............................................................................. 5
Place of Payment.................................................................... 5
Predecessor Note.................................................................... 5
Redemption Date..................................................................... 5
Redemption Price.................................................................... 6
Regular Record Date................................................................. 6
Release Date........................................................................ 6
Responsible Officer................................................................. 6
Securities Act...................................................................... 6
Senior Note First Mortgage Bonds.................................................... 6
Special Record Date................................................................. 6
Stated Maturity..................................................................... 6
Subsidiary.......................................................................... 6
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Trust Indenture Act................................................................. 6
Trustee............................................................................. 6
U.S. Government Obligation.......................................................... 7
Vice President...................................................................... 7
SECTION 102. Compliance Certificates and Opinions..................................................... 7
SECTION 103. Form of Documents Delivered to Trustee................................................... 7
SECTION 104. Acts of Holders; Record Dates............................................................ 8
SECTION 105. Notices, Etc., to Trustee and Company.................................................... 10
SECTION 106. Notice to Holders; Waiver................................................................ 10
SECTION 107. Conflict with Trust Indenture Act........................................................ 11
SECTION 108. Effect of Headings and Table of Contents................................................. 11
SECTION 109. Successors and Assigns................................................................... 11
SECTION 110. Separability Clause...................................................................... 11
SECTION 111. Benefits of Indenture.................................................................... 11
SECTION 112. Governing Law............................................................................ 11
SECTION 113. Legal Holidays 12
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally.......................................................................... 12
SECTION 202. Form of Face of Note..................................................................... 12
SECTION 203. Form of Reverse of Note.................................................................. 14
SECTION 204. Form of Legend for Global Notes.......................................................... 18
SECTION 205. Form of Trustee's Certificate of Authentication.......................................... 19
ARTICLE THREE
THE NOTES
SECTION 301. Amount Unlimited; Issuable in Series..................................................... 19
SECTION 302. Denominations............................................................................ 22
SECTION 303. Execution, Authentication, Delivery and Dating........................................... 22
SECTION 304. Temporary Notes.......................................................................... 24
SECTION 305. Registration, Registration of Transfer and Exchange...................................... 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.............................................. 26
SECTION 307. Payment of Interest; Interest Rights Preserved........................................... 26
SECTION 308. Persons Deemed Owners.................................................................... 27
SECTION 309. Cancellation............................................................................. 28
SECTION 310. Computation of Interest.................................................................. 28
SECTION 311. CUSIP Numbers 28
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SECTION 312. Payments on Senior Note First Mortgage Bonds............................................. 28
ARTICLE FOUR
SENIOR NOTE FIRST MORTGAGE BONDS
SECTION 401. Acceptance of Senior Note First Mortgage Bonds........................................... 29
SECTION 402. Terms of Senior Note First Mortgage Bonds................................................ 29
SECTION 403. Senior Note First Mortgage bonds as Security for Notes................................... 29
SECTION 404. Fair Value Certificate................................................................... 30
SECTION 405. Senior Note First Mortgage Bonds Held by the Trustee..................................... 31
SECTION 406. No Transfer of Senior Note First Mortgage bonds; Exception............................... 31
SECTION 407. Delivery to the Company of all Senior Note First Mortgage bonds.......................... 31
SECTION 408. Further Assurances....................................................................... 32
SECTION 409. Exchange and Surrender of Senior Note First Mortgage bonds............................... 32
ARTICLE FIVE
SATISFACTION AND DISCHARGE
SECTION 501. Satisfaction and Discharge of Indenture.................................................. 33
SECTION 502. Application of Trust Money............................................................... 34
ARTICLE SIX
REMEDIES
SECTION 601. Events of Default........................................................................ 34
SECTION 602. Acceleration of Maturity; Rescission and Annulment....................................... 36
SECTION 603. Collection of Indebtedness and Suits for
Enforcement by Trustee.......................................................... 37
SECTION 604. Trustee May File Proofs of Claim......................................................... 37
SECTION 605. Trustee May Enforce Claims Without Possession
of Notes........................................................................ 38
SECTION 606. Application of Money Collected........................................................... 38
SECTION 607. Limitation on Suits...................................................................... 38
SECTION 608. Unconditional Right of Holders to Receive Principal,
Premium and Interest............................................................ 39
SECTION 609. Restoration of Rights and Remedies....................................................... 39
SECTION 610. Rights and Remedies Cumulative........................................................... 40
SECTION 611. Delay or Omission Not Waiver............................................................. 40
SECTION 612. Control by Holders....................................................................... 40
SECTION 613. Waiver of Past Defaults.................................................................. 40
SECTION 614. Undertaking for Costs.................................................................... 41
SECTION 615. Waiver of Usury, Stay or Extension Laws.................................................. 41
ARTICLE SEVEN
THE TRUSTEE
SECTION 701. Certain Duties and Responsibilities...................................................... 41
SECTION 702. Notice of Defaults....................................................................... 42
SECTION 703. Certain Rights of Trustee................................................................ 42
SECTION 704. Not Responsible for Recitals or Issuance of Notes........................................ 43
SECTION 705. May Hold Notes........................................................................... 43
SECTION 706. Money Held in Trust...................................................................... 43
SECTION 707. Compensation and Reimbursement........................................................... 44
SECTION 708. Conflicting Interests.................................................................... 44
SECTION 709. Corporate Trustee Required; Eligibility.................................................. 45
SECTION 710. Resignation and Removal; Appointment of Successor........................................ 45
SECTION 711. Acceptance of Appointment by Successor................................................... 46
SECTION 712. Merger, Conversion, Consolidation or Succession
to Business.................................................................... 47
SECTION 713. Preferential Collection of Claims Against Company........................................ 48
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SECTION 714. Appointment of Authenticating Agent...................................................... 48
ARTICLE EIGHT
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 801. Company to Furnish Trustee Names and Addresses
of Holders...................................................................... 50
SECTION 802. Preservation of Information; Communications
to Holders...................................................................... 50
SECTION 803. Reports by Trustee....................................................................... 50
SECTION 804. Reports by Company....................................................................... 51
ARTICLE NINE
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 901. Company May Consolidate, Etc., Only on
Certain Terms.................................................................. 51
SECTION 902. Successor Substituted.................................................................... 52
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 1001. Supplemental Indentures Without Consent of Holders...................................... 53
SECTION 1002. Supplemental Indentures With Consent of Holders......................................... 54
SECTION 1003. Execution of Supplemental Indentures.................................................... 55
SECTION 1004. Effect of Supplemental Indentures....................................................... 55
SECTION 1005. Conformity with Trust Indenture Act..................................................... 55
SECTION 1006. Reference in Securities to Supplemental Indentures...................................... 55
ARTICLE ELEVEN
COVENANTS
SECTION 1101. Payment of Principal, Premium and Interest.............................................. 56
SECTION 1102. Maintenance of Office or Agency......................................................... 56
SECTION 1103. Money for Notes Payments to Be Held in Trust............................................ 56
SECTION 1104. Statement by Officers as to Default..................................................... 57
SECTION 1105. Recording, Filing, etc.; Opinions of Counsel............................................ 58
SECTION 1106. Existence............................................................................... 58
SECTION 1107. Maintenance of Properties............................................................... 59
SECTION 1108. Payment of Taxes and Other Claims....................................................... 59
SECTION 1109. Waiver of Certain Covenants............................................................. 59
SECTION 1110. Calculation of Original Issue Discount.................................................. 59
ARTICLE TWELVE
REDEMPTION OF NOTES
SECTION 1201. Applicability of Article................................................................ 60
SECTION 1202. Election to Redeem; Notice to Trustee................................................... 60
SECTION 1203. Selection by Trustee of Notes to Be Redeemed............................................ 60
SECTION 1204. Notice of Redemption.................................................................... 61
SECTION 1205. Deposit of Redemption Price............................................................. 62
SECTION 1206. Notes Payable on Redemption Date........................................................ 62
SECTION 1207. Notes Redeemed in Part.................................................................. 62
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ARTICLE THIRTEEN
SINKING FUNDS
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SECTION 1301. Applicability of Article................................................................ 63
SECTION 1302. Satisfaction of Sinking Fund Payments with Notes........................................ 63
SECTION 1303. Redemption of Notes for Sinking Fund.................................................... 63
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or
Covenant Defeasance............................................................. 64
SECTION 1402. Defeasance and Discharge................................................................ 64
SECTION 1403. Covenant Defeasance..................................................................... 65
SECTION 1404. Conditions to Defeasance or Covenant Defeasance......................................... 65
SECTION 1405. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions...................................... 67
SECTION 1406. Reinstatement........................................................................... 67
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGEMENTS
<PAGE>
INDENTURE, dated as of November 15, 1996, between Arizona Public Service
Company, a corporation duly organized and existing under the laws of the State
of Arizona (herein called the "Company"), having its principal office at 400
North Fifth Street, Phoenix, Arizona 85004, and The Bank of New York, a New York
banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Senior Notes
(herein called the "Notes"), to be issued in one or more series as in this
Indenture provided.
Subject to the provisions of Section 403 hereof, the Company may issue one or
more series of Senior Note First Mortgage Bonds (as hereinafter defined) and
deliver such Senior Note First Mortgage Bonds to the Trustee to hold in trust
for the benefit of the respective Holders from time to time of the related
series of Notes, or require the Trustee to deliver to the Company for
cancellation any and all Senior Note First Mortgage Bonds held by the Trustee.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually agreed, for the benefit of all Holders of
the Notes or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted in the
United States of America;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
<PAGE>
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 714 to act on behalf of the Trustee to authenticate Notes of one or
more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary or Associate Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary, an Assistant Secretary or an Associate
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in the City of
New York, New York at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located at
101 Barclay Street, New York, New York 10286.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
2
<PAGE>
"Covenant Defeasance" has the meaning specified in Section 1403.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1402.
"Depositary" means, with respect to Notes of any series issuable in whole
or in part in the form of one or more Global Notes, a clearing agency registered
under the Exchange Act that is designated to act as Depositary for such Notes as
contemplated by Section 301.
"Event of Default" has the meaning specified in Section 601.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Expert" means any officer of the Company familiar with the terms of the
First Mortgage and this Indenture, any law firm, any investment banking firm, or
any other Person, in each case that is appointed by Company Order, is an expert
in the applicable matter, and is satisfactory in the reasonable judgment of the
Trustee.
"First Mortgage" means the Mortgage and Deed of Trust, dated as of July 1,
1946, from the Company to The Bank of New York, as successor trustee to Bank of
America National Trust and Savings Association, as supplemented and amended from
time to time.
"First Mortgage Bonds" means all first mortgage bonds issued by the
Company and outstanding under the First Mortgage, other than Senior Note First
Mortgage Bonds.
"Global Note" means a Note that evidences all or part of the Notes of any
series and bears the legend set forth in Section 204 (or such legend as may be
specified as contemplated by Section 301 for such Notes).
"Holder" means a Person in whose name a Note is registered in the Note
Register.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Notes established as contemplated by Section 301.
"independent", when applied to any accountant, appraiser, or other Expert,
shall mean such a Person who is in fact independent, selected by the Company and
approved by the Trustee in the exercise of reasonable care.
"Interest", when used with respect to an Original Issue Discount Note
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Note, means the
Stated Maturity of an instalment of interest on such Note.
3
<PAGE>
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Note, means the date on which
the principal of such Note or an instalment of principal becomes due and payable
as therein or herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.
"Mortgage Trustee" means the Person serving as trustee at the time under
the First Mortgage.
"Notes" has the meaning stated in the first recital of this Indenture and
more particularly means any Notes authenticated and delivered under this
Indenture.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
"Notice of Default" means a written notice of the kind specified in
Section 601(4).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1104 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, or other counsel who shall be acceptable to the
Trustee.
"Original Issue Discount Note" means any Note which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 602.
"Outstanding", when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(1) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(2) Notes for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Notes; provided that, if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(3) Notes as to which Defeasance has been effected pursuant to Section
1402; and
4
<PAGE>
(4) Notes which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Notes are held by a bona fide purchaser in whose hands such Notes are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given, made or taken any request,
demand, authorization, direction, notice, consent, waiver or other action
hereunder as of any date, (A) the principal amount of an Original Issue Discount
Note which shall be deemed to be Outstanding shall be the amount of the
principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 602, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Note is not determinable, the principal amount of such Note which shall be
deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Note denominated in
one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Note (or, in the case of a Note described in Clause (A) or (B) above, of
the amount determined as provided in such Clause), and (D) Notes owned by the
Company or any other obligor upon the Notes or any Affiliate of the Company or
of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, waiver
or other action, only Notes which the Trustee actually knows to be so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Notes and that
the pledgee is not the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Notes on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Notes of any series,
means the place or places where the principal of and any premium and interest on
the Notes of that series are payable as specified as contemplated by Section
301.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
5
<PAGE>
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Notes of any series means the date specified for that purpose as
contemplated by Section 301.
"Release Date" means the date as of which all First Mortgage Bonds have
been retired through payment, redemption, or otherwise at, before or after the
maturity thereof.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Senior Note First Mortgage Bonds" shall mean any bonds issued by the
Company under the First Mortgage and delivered to the Trustee pursuant to
Section 401 hereof.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Note or any instalment of
principal thereof or interest thereon, means the date specified in such Note as
the fixed date on which the principal of such Note or such instalment of
principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who
6
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is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Notes of any series shall mean the
Trustee with respect to Notes of that series.
"U.S. Government Obligation" has the meaning specified in Section 1404.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel,
7
<PAGE>
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 701) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Notes shall be proved by the Note Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Note shall bind every future Holder of the same
Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
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The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes of any series entitled to give,
make or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders of Notes of such series, provided that the Company may not
set a record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Notes of the relevant series on
such record date, and no other Holders, shall be entitled to take or revoke the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Notes of the relevant series on
the date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Trustee in writing and to each Holder of Notes of the
relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes of any series entitled to join in
the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 602, (iii) any request to institute
proceedings referred to in Section 607(2) or (iv) any direction referred to in
Section 612, in each case with respect to Notes of such series. If any record
date is set pursuant to this paragraph, the Holders of Outstanding Notes of such
series on such record date, and no other Holders, shall be entitled to join in
such notice, declaration, request or direction or to revoke the same, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Notes of such series on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Notes of the relevant series on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Trustee, at the Company's expense, shall cause notice of
such record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Company in writing and to each Holder of Notes of the
relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other
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party hereto in writing, and to each Holder of Notes of the relevant series in
the manner set forth in Section 106, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record date
set pursuant to this Section, the party hereto which set such record date shall
be deemed to have initially designated the 180th day after such record date as
the Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable record
date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Note may do so with regard to all
or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trustee
Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Note Register, not later than
the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
the Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. Governing Law.
This Indenture and the Notes shall be governed by and construed in
accordance with the law of the State of New York, without regard to conflicts of
laws principles thereof.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Note shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Notes (other
than a provision of any Note which specifically states that such provision shall
apply in lieu of this Section)) payment of interest or principal (and premium,
if any) need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity.
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally.
The Notes of each series shall be in substantially the form set forth in
this Article, or in such other form as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or Depositary therefor or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. If the
form of Notes of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
303 for the authentication and delivery of such Notes.
The definitive Notes shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
SECTION 202. Form of Face of Note.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
ARIZONA PUBLIC SERVICE COMPANY
..................................................
No. ......... $ ........
CUSIP No.______
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Arizona Public Service Company, a corporation duly organized and existing
under the laws of Arizona (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
..............................................., or registered assigns, the
principal sum of ...................................... Dollars on
........................................................ [if the Note is to bear
interest prior to Maturity, insert _ , and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ............ and
............ in each year, commencing ........., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment [if applicable,
insert _ , provided that any principal and premium, and any such instalment of
interest, which is overdue shall bear interest at the rate of ...% per annum (to
the extent that the payment of such interest shall be legally enforceable), from
the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ....... or .......
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Notes of this series not less than
10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture].
[If the Note is not to bear interest prior to Maturity, insert _ The principal
of this Note shall not bear interest except in the case of a default in payment
of principal upon acceleration, upon redemption or at Stated Maturity and in
such case the overdue principal and any overdue premium shall bear interest at
the rate of ....% per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or made available for payment. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of ......%
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or made available for payment.
Interest on any overdue interest shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert _ any such] interest on this Note will be made at the office or agency of
the Company maintained for that purpose in ............, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert _ ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Note Register].
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Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By..........................
Attest:
......................
SECTION 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes"), issued and to be issued in one or more series under
an Indenture, dated as of November 15, 1996 (herein called the "Indenture",
which term shall have the meaning assigned to it in such instrument), between
the Company and The Bank of New York, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered. This Note is one of the series
designated on the face hereof [if applicable, insert _ , limited in aggregate
principal amount to $...........].
[If the Note is issued before the Release Date, insert __ Prior to the
Release Date (as hereinafter defined), this Note will be secured by First
Mortgage Bonds, Senior Note Series ....... (the "Senior Note Series .......
Bonds") delivered by the Company to the Trustee for the benefit of the Holders
of the series of Notes of which this Note is a part, issued under the Mortgage
and Deed of Trust, dated as of July 1, 1946, from the Company to The Bank of New
York, as successor trustee (the "Mortgage Trustee"), as supplemented and amended
(the "First Mortgage"). Reference is made to the First Mortgage for a
description of property mortgaged and pledged, the nature and extent of the
security, the rights of the holders of the first mortgage bonds under the First
Mortgage and of the Mortgage Trustee in respect thereof, the duties and
immunities of the Mortgage Trustee and the terms and conditions upon which the
Senior Note Series ...... Bonds are secured and the circumstances under which
additional first mortgage bonds may be issued.
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<PAGE>
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR NOTE
FIRST MORTGAGE BONDS, AS SUCH TERM IS DEFINED IN THE INDENTURE,) HAVE BEEN
RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE
MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS
SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.]
[If applicable, insert _ The Notes of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert _
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert _ on or after .........., 19..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percen- tages of the principal amount): If redeemed [if applicable, insert _ on
or before ..............., ...%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,
Year Redemption Year Redemption
- ---- Price ---- Price
---------- ----------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert _ (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Notes, or
one or more Predecessor Notes, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert _ The Notes of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert _ on or after ............], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,
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Year Redemption Price Redemption Price For
- ---- For Redemption Redemption Otherwise
Through Operation Than Through Operation
of the of the Sinking Fund
Sinking Fund ----------------------
-----------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Notes, or one or more Predecessor
Notes, of record at the close of business on the relevant Record Dates referred
to on the face hereof, all as provided in the Indenture.]
[If applicable, insert _ Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Notes of this series as contemplated by
[if applicable, insert _ Clause (2) of] the preceding paragraph as a part of, or
in anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than .....% per annum.]
[If applicable, insert _ The sinking fund for this series provides for the
redemption on ............ in each year beginning with the year ....... and
ending with the year ...... of [if applicable, insert _ not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Notes of this series. Notes of this series acquired or
redeemed by the Company otherwise than through [if applicable, insert _
mandatory] sinking fund payments may be credited against subsequent [if
applicable, insert _ mandatory] sinking fund payments otherwise required to be
made [if applicable, insert _ , in the inverse order in which they become due].]
[If the Note is subject to redemption of any kind, insert _ In the event
of redemption of this Note in part only, a new Note or Notes of this series and
of like tenor for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert _ The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Note] [or] [certain restrictive
covenants and Events of Default with respect to this Note] [, in each case] upon
compliance with certain conditions set forth in the Indenture.]
[If the Note is not an Original Issue Discount Note, insert _ If an Event
of Default with respect to Notes of this series shall occur and be continuing,
the principal of the Notes of
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this series may be declared due and payable in the manner and with the effect
provided in the Indenture.]
[If the Note is an Original Issue Discount Note, insert _ If an Event of
Default with respect to Notes of this series shall occur and be continuing, an
amount of principal of the Notes of this series may be declared due and payable
in the manner and with the effect provided in the Indenture. Such amount shall
be equal to _ insert formula for determining the amount. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on any
overdue principal, premium and interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and premium and
interest, if any, on the Notes of this series shall terminate.]
[If the Note is issued before the Release Date, insert _ If an Event of
Default with respect to Notes of this series shall occur and be continuing, the
principal of the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture and, upon such declaration, the Trustee can
demand the acceleration of the payment of principal of the Senior Note Series
...... Bonds as provided in the Indenture.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Notes at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes of this series, the Holders of not less than 25% in principal amount of
the Notes of this series at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not
have received from the Holders of a majority in principal amount of Notes of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement of
any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.
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<PAGE>
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and interest on
this Note are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Note Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes of this series are issuable only in registered form without
coupons in denominations of $....... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
SECTION 204. Form of Legend for Global Notes.
Unless otherwise specified as contemplated by Section 301 for the Notes
evidenced thereby, every Global Note authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO
TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
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SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
CERTIFICATION OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK,
As Trustee
By..........................
Authorized Signatory
ARTICLE THREE
THE NOTES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited.
The Notes may be issued in one or more series. There shall be established
by or pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of Notes of
any series,
(1) the title of the Notes of the series (which shall distinguish the
Notes of the series from Notes of any other series);
(2) any limit upon the aggregate principal amount of the Notes of the
series which may be authenticated and delivered under this Indenture (except
for Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes of the series pursuant to Section
304, 305, 306, 1006 or 1207 and except for any Notes which, pursuant to
Section 303, are deemed never to have been authenticated and delivered
hereunder);
(3) the Person to whom any interest on a Note of the series shall be
payable, if other than the Person in whose name that Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of any Notes of the series
is payable;
(5) the rate or rates at which any Notes of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on
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which any such interest shall be payable, the manner (if any) of
determination of such Interest Payment Dates and the Regular Record Date for
any such interest payable on any Interest Payment Date;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the place or places where the principal of and any premium and
interest on any Notes of the series shall be payable;
(8) the period or periods within which, the price or prices at which
and the terms and conditions upon which any Notes of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Notes shall be evidenced;
(9) the obligation, if any, of the Company to redeem or purchase any
Notes of the series pursuant to any sinking fund or analogous provisions or
at the option of the Holder thereof and the period or periods within which,
the price or prices at which and the terms and conditions upon which any
Notes of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Notes of the series shall be
issuable;
(11) if the amount of principal of or any premium or interest on any
Notes of the series may be determined with reference to an index or pursuant
to a formula, the manner in which such amounts shall be determined;
(12) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Notes of the series shall be payable and the
manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition
of "Outstanding" in Section 101;
(13) if the principal of or any premium or interest on any Notes of the
series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those
in which such Notes are stated to be payable, the currency, currencies or
currency units in which the principal of or any premium or interest on such
Notes as to which such election is made shall be payable, the periods within
which and the terms and conditions upon which such election is to be made and
the amount so payable (or the manner in which such amount shall be
determined);
(14) if other than the entire principal amount thereof, the portion of
the principal amount of any Notes of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 602;
(15) if the principal amount payable at the Stated Maturity of any
Notes of the series will not be determinable as of any one or more dates
prior to the Stated Maturity,
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the amount which shall be deemed to be the principal amount of such
Notes as of any such date for any purpose thereunder or hereunder, including
the principal amount thereof which shall be due and payable upon any Maturity
other than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the manner in
which such amount deemed to be the principal amount shall be determined);
(16) if applicable, that the Notes of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1402 or Section 1403
or both such Sections and, if other than by a Board Resolution, the manner in
which any election by the Company to defease such Notes shall be evidenced;
(17) if applicable, that any Notes of the series shall be issuable in
whole or in part in the form of one or more Global Notes and, in such case,
the respective Depositaries for such Global Notes, the form of any legend or
legends which shall be borne by any such Global Note in addition to or in
lieu of that set forth in Section 204 and any circumstances in addition to or
in lieu of those set forth in Clause (2) of the last paragraph of Section 305
in which any such Global Note may be exchanged in whole or in part for Notes
registered, and any transfer of such Global Note in whole or in part may be
registered, in the name or names of Persons other than the Depositary for
such Global Note or a nominee thereof;
(18) if any Notes of the series shall be issued prior to the Release
Date, the designation of the series of Senior Note First Mortgage Bonds to be
delivered to the Trustee in connection with the issuance of such series of
Notes;
(19) any addition to or change in the Events of Default which applies
to any Notes of the series and any change in the right of the Trustee or the
requisite Holders of such Notes to declare the principal amount thereof due
and payable pursuant to Section 602;
(20) any addition to or change in the covenants set forth in Article
Eleven which applies to Notes of the series; and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 1001(5)).
All Notes of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the Board
Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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SECTION 302. Denominations.
The Notes of each series shall be issuable only in fully registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Notes of any series, the Notes of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Notes, the Notes shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal affixed thereto or reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes of any series executed by the Company
to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes and, if prior to the Release Date,
Senior Note First Mortgage Bonds of a series of Senior Note First Mortgage Bonds
conforming to the requirements of Sections 401 and 402 hereof, and the Trustee
in accordance with the Company Order shall authenticate and deliver such Notes.
In authenticating such Notes, and accepting the additional responsibilities
under this Indenture in relation to such Notes, the Trustee shall be entitled to
receive, and (subject to Section 701) shall be fully protected in relying upon,
(1) if prior to the Release Date, the certificate of an Expert meeting the
requirements of Section 404(a) hereof and a series of Senior Note First Mortgage
Bonds meeting the requirements of Section 403 hereof, and (2) an Opinion of
Counsel stating,
(A) if the form of such Notes has been established by or pursuant to
Board Resolution or in a supplemental indenture as permitted by Section 201,
that such form has been duly authorized by the Company and established in
conformity with the provisions of this Indenture;
(B) if the terms of such Notes have been duly authorized by the Company
and established by or pursuant to Board Resolution or in a supplemental
indenture as permitted by Section 301, that such terms have been established
in conformity with the provisions of this Indenture;
(C) that such Notes, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly issued under the
Indenture and will constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by the Indenture, and enforceable
in accordance with their terms, subject to (a) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
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applicability relating to or affecting creditors' rights and to general
equity principles, (b) the necessity for compliance with the statutory
procedural rights governing the exercise of remedies by a secured creditor,
and (c) the qualification that certain waivers, proecedures, remedies, and
other provisions of such Notes and this Indenture may be unenforceable under
or limited by the laws of the State of Arizona; and
(D) if prior to the Release Date, that the Senior Note First Mortgage
Bonds of the related series of Senior Note First Mortgage Bonds being
delivered to the Trustee in connection with the issuance of such series of
Notes have been duly authorized, executed, authenticated, issued, and
delivered, constitute valid and legally binding obligations of the Company
entitled to the benefits and security provided by the First Mortgage, except
as the same may be limited by (a) general principles of equity or by
bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
laws or equitable principles relating to or affecting the enforcement of
creditors' rights generally or the enforcement of the security provided by
the First Mortgage, (b) the necessity for compliance with the statutory
procedural requirements governing the exercise of remedies by a secured
creditor, and (c) the qualification that certain waivers, procedures,
remedies, and other provisions of the Senior Note First Mortgage Bonds and
the First Mortgage may be unenforceable under or limited by the law of the
State of Arizona; and that such Senior Note First Mortgage Bonds are entitled
to the benefits provided by the First Mortgage, equally and ratably, with all
First Mortgage Bonds and other Senior Note First Mortgage Bonds (if any)
outstanding thereunder, except as to sinking fund provisions; and
(E) that the Company's execution and delivery of this Indenture, such
Notes, such First Mortgage, and any such Senior Note First Mortgage Bonds
have been duly authorized by the Arizona Corporation Commission (the "ACC"),
the ACC had jurisdiction in the premises, and no further approval,
authorization, or consent of any other public board or body is necessary to
the validity of such execution and delivery of this Indenture, such Notes,
such First Mortgage, and any such Senior Note First Mortgage Bonds, except as
may be required under state securities or blue sky laws, as to which laws
such counsel shall not be required to express an opinion.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Notes if the issue of such Notes pursuant to this
Indenture will affect the Trustee's own rights, duties or immunities under the
Notes and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Notes of a series are not to be originally issued at one time,
it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Note of such series if such documents are delivered at or
prior to the authentication upon original issuance of the first Note of such
series to be issued.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature of an authorized signatory, and such certificate
upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder.
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Notwithstanding the foregoing, if any Note shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Note to the Trustee for cancellation as provided in Section
309, for all purposes of this Indenture such Note shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Notes.
Pending the preparation of definitive Notes of any series, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as evidenced by their execution of
such Notes.
If temporary Notes of any series are issued, the Company will cause
definitive Notes of that series to be prepared without unreasonable delay. After
the preparation of definitive Notes of such series, the temporary Notes of such
series shall be exchangeable for definitive Notes of such series upon surrender
of the temporary Notes of such series at the office or agency of the Company in
a Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes of any series, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Notes of the same series, of any authorized
denominations and of like tenor and aggregate principal amount. Until so
exchanged, the temporary Notes of any series shall in all respects be entitled
to the same benefits under this Indenture as definitive Notes of such series and
tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office or in any other
office or agency of the Company in a Place of Payment being herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Trustee is hereby appointed "Note
Registrar" for the purpose of registering Notes and transfers of Notes as herein
provided.
Upon surrender for registration of transfer of any Note of a series at the
office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of the
same series, of any authorized denominations and of like tenor and aggregate
principal amount.
At the option of the Holder, Notes of any series may be exchanged for
other Notes of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Notes which the Holder making the exchange is entitled to receive.
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All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Note Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304, 1006 or 1207 not involving any transfer.
If the Notes of any series (or of any series and specified tenor) are to
be redeemed, the Company shall not be required (A) to issue, register the
transfer of or exchange any Notes of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Notes selected for redemption and ending at the close of business on the
day of such mailing, or (B) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Notes:
(1) Each Global Note authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Note or a
nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Note shall constitute a single Note
for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Note may be exchanged in whole or in part for Notes registered, and no
transfer of a Global Note in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Note or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Note or (ii)
has ceased to be a clearing agency registered under the Exchange Act, (B)
there shall have occurred and be continuing an Event of Default with respect
to such Global Note or (C) there shall exist such circumstances, if any, in
addition to or in lieu of the foregoing as have been specified for this
purpose as contemplated by Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Note for
other Notes may be made in whole or in part, and all Notes issued in exchange
for a Global Note or any portion thereof shall be registered in such names as
the Depositary for such Global Note shall direct.
(4) Every Note authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Note or any portion
thereof, whether pursuant to this
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Section, Section 304, 306, 1006 or 1207 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Note,
unless such Note is registered in the name of a Person other than the
Depositary for such Global Note or a nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Note of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Note and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Note has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Note, a new Note of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect
to any series of Notes, interest on any Note which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Note (or one or more Predecessor Notes) is registered
at the close of business on the Regular Record Date for such interest.
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Any interest on any Note of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes of such series (or their respective
Predecessor Notes) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed
in the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Note of such
series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to each Holder of Notes of such
series in the manner set forth in Section 106, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Notes of
such series (or their respective Predecessor Notes) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the Notes
of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Notes may be listed,
and upon such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of
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principal of and any premium and (subject to Section 307) any interest on such
Note and for all other purposes whatsoever, whether or not such Note be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Notes surrendered for payment, redemption, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Notes previously authenticated hereunder which the Company has not issued
and sold, and all Notes so delivered shall be promptly cancelled by the Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Notes held by the Trustee shall be disposed of as
directed by a Company Order; provided, however, that the Trustee shall not be
required to destroy such cancelled Notes.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Notes of
any series, interest on the Notes of each series shall be computed on the basis
of a 360-day year of twelve 30-day months.
SECTION 311. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.
SECTION 312. Payments on Senior Note First Mortgage Bonds.
Subject to Article Five and Article Fourteen hereof, all payments made by
the Company to the Trustee on a series of Senior Note First Mortgage Bonds shall
be applied by the Trustee to pay, when due, principal of, premium, if any, and
interest on the related series of Notes and, to the extent so applied, shall
satisfy the Company's obligations on such Notes. The Company shall pay to the
Trustee principal of, premium, if any, and interest on a series of Senior Note
First Mortgage Bonds in a manner and at a time that will enable the
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Trustee to make payments when due, of the principal of, premium, if any, and
interest on the related series of Notes.
ARTICLE FOUR
SENIOR NOTE FIRST MORTGAGE BONDS
SECTION 401. Acceptance of Senior Note First Mortgage Bonds.
At or prior to the time of issuance of a series of Notes hereunder at
any time prior to the Release Date, the Company shall deliver to the Trustee for
the benefit of the Holders of the Notes as described in Section 403 hereof, and
the Trustee shall accept therefor, Senior Note First Mortgage Bonds of a series
of Senior Note First Mortgage Bonds not theretofore delivered to the Trustee,
registered in the name of the Trustee and conforming to the requirements of
Section 402 hereof.
SECTION 402. Terms of Senior Note First Mortgage Bonds.
Each series of Senior Note First Mortgage bonds delivered to the
Trustee pursuant to Section 401 hereof shall have the same rate or rates of
interest (or interest calculated in the same manner), interest payment dates,
maturity and redemption provisions, and shall be in the same aggregate principal
amount, as the related series of Notes being issued.
SECTION 403. Senior Note First Mortgage Bonds as Security for Notes.
Until the Release Date and subject to Article Five and Article Fourteen
hereof, Senior Note First Mortgage Bonds delivered to the Trustee for the
benefit of the Holders of a related series of Notes shall serve as security for
any and all obligations of the Company under such related series of Notes,
including, but not limited to (1) the full and prompt payment of the principal
and premium, if any, on such Notes when and as the same shall become due and
payable in accordance with the terms and provisions of this Indenture or the
Notes either at the Stated Maturity thereof, upon acceleration of the maturity
thereof or upon redemption, and (2) the full and prompt payment of any interest
on such Notes when and as the same shall become due and payable in accordance
with the terms and provisions of this Indenture or the Notes.
Notwithstanding anything in this Indenture to the contrary, from and
after the Release Date, the obligation of the Company to make payment with
respect to the principal of and premium, if any, and interest on the Senior Note
First Mortgage Bonds shall be deemed satisfied and discharged as provided in the
supplemental trust indenture or indentures to the First Mortgage creating such
Senior First Mortgage Bonds and the Senior Note First Mortgage Bonds shall cease
to secure in any manner Notes theretofore or subsequently issued. From and after
the Release Date, all Notes, whether theretofore or subsequently issued, shall
be unsecured, and any conditions to the issuance of Notes that refer or relate
to Senior Note First Mortgage Bonds or the First Mortgage shall be inapplicable.
Following the Release Date, the Company shall cause the First Mortgage to be
closed and the
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Company shall not issue any additional First Mortgage Bonds or Senior Note First
Mortgage Bonds under the First Mortgage. Notice of the occurrence of the Release
Date shall be given by the Trustee to the Holders of the Notes in the manner
provided for in Section 106 hereof not later than 30 days after the Company
notifies the Trustee of the occurrence of the Release Date.
SECTION 404. Fair Value Certificate.
(a) Upon the delivery by the Company to the Trustee of Senior Note
First Mortgage Bonds pursuant to Section 401 hereof, the Company shall
simultaneously therewith deliver to the Trustee a certificate of an Expert (1)
stating that it is familiar with the provisions of such Senior Note First
Mortgage Bonds and of this Indenture; (2) identifying such Senior Note First
Mortgage Bonds; (3) identifying the Notes being issued contemporaneously
therewith and (4) stating the fair value to the Company of such Senior Note
First Mortgage Bonds. If the fair value to the Company of the Senior Note First
Mortgage Bonds so delivered, as described in the certificate to be delivered
pursuant to this Section 404(a), both (l) is equal to or exceeds (A) $25,000 and
(B) 1% of the principal amount of the Notes outstanding at the date of delivery
of such Senior Note First Mortgage Bonds and (2) together with the fair value to
the Company, as described in the certificates delivered pursuant to this Section
404(a), of all other Senior Note First Mortgage Bonds delivered to the Trustee
since the commencement of the then current calendar year, is equal to or exceeds
10% of the principal amount of the Notes outstanding at the date of delivery of
such Senior Note First Mortgage Bonds, then the certificate required by this
Section 404(a) shall (1) be delivered by an independent Expert and (2) shall, in
addition to the certifications described above, state the fair value to the
Company of all Senior Note First Mortgage Bonds delivered to the Trustee
pursuant to Section 401 hereof since the commencement of the then current year
as to which a certificate was not delivered by an independent Expert.
(b) If Senior Note First Mortgage Bonds are delivered or surrendered to
the Company pursuant to Section 407 or 409 hereof, the Company shall
simultaneously therewith deliver to the Trustee a certificate of an Expert (1)
stating that it is familiar with the provisions of such Senior Note First
Mortgage Bonds and of this Indenture, (2) identifying such Senior Note First
Mortgage Bonds, (3) if applicable, identifying the Notes, the payment of the
interest on and principal of which has been discharged hereunder, (4) stating
that such delivery or surrender will not impair the lien of this Indenture in
contravention of the provisions of this Indenture. If, prior to the Release
Date, the fair value of the Senior Note First Mortgage Bonds so delivered and
surrendered, as described in the certificate to be delivered pursuant to this
Section 404(b), both (l) is equal to or exceeds (A) $25,000 and (B) 1% of the
principal amount of the Notes outstanding at the date of delivery or surrender
of such Senior Note First Mortgage Bonds and (2) together with the fair value,
as described in the certificates delivered pursuant to this Section 404(b), of
all other Senior Note First Mortgage Bonds released from the lien of this
Indenture since the commencement of the then current calendar year, is equal to
or exceeds 10% of the principal amount of the Notes outstanding at the date of
delivery or surrender of such Senior Note First Mortgage Bonds, then the
certificate required by this Section 404(b) shall be delivered by an independent
Expert.
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If, in connection with a delivery or surrender of outstanding Senior
Note First Mortgage Bonds provided for in subsection (a) or (b) of this Section
404, as the case may be, the Company provides to the trustee an Opinion of
Counsel stating that the certificate described by the applicable subsection is
not required by law, such certificate shall not be required to be delivered
hereunder in connection with such delivery or surrender.
SECTION 405. Senior Note First Mortgage Bonds Held by the Trustee.
The Trustee, as a Holder of Senior Note First Mortgage Bonds, shall
attend a meeting of holders of First Mortgage Bonds under the First Mortgage as
to which it receives due notice, or, at its option, shall deliver its proxy in
connection therewith. Either at such meeting, or otherwise where consent of
holders of First Mortgage Bonds issued under the First Mortgage is sought
without a meeting, the Trustee shall vote all of the Senior Note First Mortgage
Bonds held by it, or shall consent or withhold its consent with respect thereto,
as directed by the Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes; provided, however, that the Trustee shall not
vote as such holder of a particular series of Senior Note First Mortgage Bonds
in favor of, or give its consent to, any action which, in the Trustee's opinion,
would materially adversely affect such series of Senior Note First Mortgage
Bonds in a manner not shared generally by all other Senior Note First Mortgage
Bonds, except upon notification by the Trustee to the Holders of the related
series of Outstanding Notes of such proposal and consent thereto of the holders
of not less than a majority in aggregate principal amount of the Outstanding
Notes of such series.
SECTION 406. No Transfer of Senior Note First Mortgage Bonds; Exception.
Except as required to effect an assignment to a successor trustee under
this Indenture or pursuant to Section 407 or Section 409 hereof, the Trustee
shall not sell, assign or transfer the Senior Note First Mortgage Bonds and the
Company shall issue stop transfer instructions to the Mortgage Trustee and any
transfer agent under the First Mortgage to effect compliance with this Section
406.
SECTION 407. Delivery to the Company of all Senior Note First Mortgage Bonds.
When the obligation of the Company to make payment with respect to the
principal of and premium, if any, and interest on the Senior Note First Mortgage
Bonds shall be satisfied or deemed satisfied pursuant to Section 403, Section
501 or Article Fourteen hereof, the Trustee shall, upon written request of the
Company and receipt of the certificate of the Expert described in Section 404(b)
hereof (if such certificate is then required by Section 404(b) hereof), deliver
to the Company without charge therefor all of the Senior Note First Mortgage
Bonds, together with such appropriate instruments of transfer or release as may
be reasonably requested by the Company. All Senior Note First Mortgage Bonds
delivered to the Company in accordance with this Section 407 shall be delivered
by the Company to the First Mortgage Trustee for cancellation.
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SECTION 408. Further Assurances.
The Company, at its own expense, shall do such further lawful acts and
things, and execute and deliver such additional conveyances, assignments,
assurances, agreements, financing statements and instruments, as may be
necessary in order to further assign, assure, perfect and confirm to the Trustee
its security interest in the Senior Note First Mortgage Bonds and for
maintaining, protecting and preserving such security interest.
SECTION 409. Exchange and Surrender of Senior Note First Mortgage Bonds.
At any time upon receipt of a Company Order at the written direction of
the Company, the Trustee shall surrender to the Company all or part of the
Senior Note First Mortgage Bonds in exchange for Senior Note First Mortgage
Bonds equal in aggregate principal amounts to, in different denominations than
but of the same series and with all other terms identical to, the Senior Note
First Mortgage Bonds so surrendered to the Company. In addition, at any time a
Note shall cease to be entitled to any lien, benefit or security under this
Indenture pursuant to Section 501 or Article Fourteen hereof, the Trustee shall
surrender an equal principal amount of Senior Note First Mortgage Bonds of the
related series to the Company for cancellation. The Trustee shall, together with
such Senior Note First Mortgage Bonds, deliver to the Company such appropriate
instruments of transfer or release as the Company may reasonably request. Prior
to the surrender required by this paragraph, the Trustee shall receive from the
Company the following, and (subject to Section 701 hereof) shall be fully
protected in relying upon, (a) an Officer's Certificate stating (i) the
aggregate outstanding principal amount of the Senior Note First Mortgage bonds
of the series surrendered by the Trustee, after giving effect to such surrender,
(ii) the aggregate Outstanding principal amount of the related series of Notes,
(iii) that the surrender of the Senior Note First Mortgage Bonds will not result
in any default under this Indenture, and (iv) that any Senior Note First
Mortgage Bonds to be received in exchange for the Senior Note First Mortgage
Bonds being surrendered comply with the provisions of this Section.
The Company shall not be permitted to cause the surrender or exchange
of all or any part of a series of Senior Note First Mortgage Bonds contemplated
in this Section, if, after such surrender or exchange, the aggregate outstanding
principal amount of the related series of Notes would exceed the aggregate
outstanding principal amount of such series of Senior Note First Mortgage Bonds
held by the Trustee. Any Senior Note First Mortgage Bonds received by the
Company pursuant to this Section 409 shall be delivered to the Mortgage Trustee
for cancellation.
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ARTICLE FIVE
SATISFACTION AND DISCHARGE
SECTION 501. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Notes herein expressly provided for), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1103) have been
delivered to the Trustee for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose money in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date of
such deposit (in the case of Notes which have become due and payable) or
to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 707, the obligations of
the Company to any Authenticating Agent under Section 714 and, if money shall
have been deposited with the Trustee
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pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 502 and the last paragraph of Section 1103 shall survive.
If the Notes are deemed paid and discharged pursuant to this Section 501
or defeased pursuant to Article Fourteen, the obligation of the Company to make
payment with respect to the principal of and premium, if any, and interest on
the Senior Note First Mortgage Bonds shall be satisfied and discharged, as
provided in the supplemental trust indenture or indentures to the First Mortgage
creating such Senior Note First Mortgage Bonds and the Senior Note First
Mortgage Bonds shall cease to secure the Notes in any manner.
If the Company shall have paid or caused to be paid the principal of and
premium, if any, and interest on any Note, as and when the same shall have
become due and payable or the Company shall have delivered to the Trustee for
cancellation any outstanding Note, such Note shall cease to be entitled to any
lien, benefit or security under this Indenture. Upon a Note of any series
ceasing to be entitled to any lien, benefit or security under this Indenture,
the obligation of the Company to make payment with respect to principal of and
premium, if any, and interest on a principal amount of the related series of
Senior Note First Mortgage Bonds equal to the principal amount of such Note
shall be satisfied and discharged and such portion of the principal amount of
such Senior Note First Mortgage Bonds shall cease to secure the Notes in any
manner.
SECTION 502. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1103, all money
deposited with the Trustee pursuant to Section 501 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE SIX
REMEDIES
SECTION 601. Events of Default.
"Event of Default", wherever used herein with respect to Notes of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Note of that series
when it becomes due and payable, and continuance of such default for a period
of 60 days; or
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(2) default in the payment of the principal of or any premium on any
Note of that series at its Maturity and continuance of such default for 5
days; or
(3) default in the deposit of any sinking fund payment, when and as due
by the terms of a Note of that series and continuance of such default for 5
days; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default
in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Notes other than that series),
and continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of a majority in
principal amount of the Outstanding Notes of that series a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(5) prior to the Release Date, a Default (as defined in the First
Mortgage) has occurred and is continuing, and the Mortgage Trustee, the
Company or Holders of at least 25% in principal amount of the outstanding
Notes shall have given written notice thereof to the Trustee;
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 90 consecutive days;
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to Notes of that
series.
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SECTION 602. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 601(6) or 601(7)) with respect to Notes of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of a majority in principal amount of the Outstanding Notes of that
series may declare the principal amount of all the Notes of that series (or, if
any Notes of that series are Original Issue Discount Notes, such portion of the
principal amount of such Notes as may be specified by the terms thereof) to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If an
Event of Default specified in Section 601(6) or 601(7) with respect to Notes of
any series at the time Outstanding occurs, the principal amount of all the Notes
of that series (or, if any Notes of that series are Original Issue Discount
Notes, such portion of the principal amount of such Notes as may be specified by
the terms thereof) shall automatically, and without any declaration or other
action on the part of the Trustee or any Holder, become immediately due and
payable. Upon such Notes becoming immediately due and payable, by declaration or
otherwise, pursuant to any of the foregoing provisions of this Section 602, the
Trustee shall immediately file with the Mortgage Trustee a written demand for
the acceleration of the payment of principal of all Senior Note First Mortgage
Bonds relating to such series of outstanding Notes pursuant to the applicable
provisions of the supplemental indenture to the First Mortgage relating to such
Senior Note First Mortgage Bonds.
At any time after such a declaration of acceleration with respect to Notes
of any series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, and prior to the receipt by the Trustee from the Mortgage Trustee of
an irrevocable, valid and unconditional notice to the Trustee of the
acceleration of the payment of principal, by declaration or otherwise, of all of
the Senior Note First Mortgage Bonds relating to such series of Notes, the
related Event of Default and its consequences (including, if given, the written
demand for the acceleration of the payment of principal of all such Senior Note
First Mortgage Bonds) will be automatically waived, resulting in an automatic
rescission and annulment of the acceleration of the Notes if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Notes of that series,
(B) the principal of (and premium, if any, on) any Notes of that
series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Notes,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such
Notes, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
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(2) all Events of Default with respect to Notes of that series, other
than the non-payment of the principal of Notes of that series which have
become due solely by such declaration of acceleration, have been cured
(including any Defaults (as defined in the First Mortgage) under the First
Mortgage, as evidenced by notice thereof received by the Trustee from the
Mortgage Trustee) or waived as provided in Section 613 or under the First
Mortgage.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 603. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Note when
such interest becomes due and payable and such default continues for a period
of 60 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof and such default continues for a
period of 5 days,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Notes, the whole amount then due and payable on such Notes for
principal and any premium and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor in
such Notes, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If an Event of Default with respect to Notes of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights (including, prior to the Release Date, any rights that the Trustee may
have as a holder of Senior Note First Mortgage Bonds of the series relating to
the series of such Notes) and the rights of the Holders of Notes of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 604. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Notes), its property or its creditors, the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take
any and all actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee (including, prior to the Release Date, any
claims of the Trustee as holder of Senior Note First Mortgage Bonds) allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, seque-strator or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount
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due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 707.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided, however, that the
Trustee may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar official and be a member of a creditors' or other similar
committee.
SECTION 605. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes in respect of which such judgment has been recovered.
SECTION 606. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 707;
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Notes for principal and any premium and interest, respectively; and
THIRD: To the payment of the balance, if any, to the Company or any other
Person or Persons legally entitled thereto.
SECTION 607. Limitation on Suits.
No Holder of any Note of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
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(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Notes of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Notes of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 608. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Note on the respective Stated Maturities expressed in such Note
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 609. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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SECTION 610. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 611. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Notes to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 612. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Notes of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Notes of such
series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 701, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would involve the Trustee in personal
liability.
SECTION 613. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series may on behalf of the Holders of all the Notes of
such series waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Note of such series, or
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(2) in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of each
Outstanding Note of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 614. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee.
SECTION 615. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SEVEN
THE TRUSTEE
SECTION 701. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act, and no implied covenants or obligations shall be read into
the Indenture against the Trustee. The phrase "default (as such term is defined
in such indenture)" as it appears in Section 315 of the Trust Indenture Act
shall mean an Event of Default with respect to a series of Notes which shall
have occurred and is continuing. Notwithstanding the foregoing, no provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
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SECTION 702. Notice of Defaults.
If a default occurs hereunder with respect to Notes of any series, the
Trustee shall give the Holders of Notes of such series notice of such default
known to the Trustee as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 601(4) with respect to Notes of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Notes of such series.
SECTION 703. Certain Rights of Trustee.
Subject to the provisions of Section 701:
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
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(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) except as other provided in Section 601(4), the Trustee shall not
be charged with knowledge of any default or Event of Default unless either
(i) a Responsible Officer of the Trustee assigned to the Corporate Trust
Department of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of the default or Event of Default, or
(ii) written notice of such default or Event of Default shall have been given
to the Trustee by the Company, any other obligor on the Notes or by any
Holder of such Notes or, in the case of an Event of Default described in
Section 601(5) by the Mortgage Trustee or Holders of at least 25% in
principal amount of the Outstanding Notes.
SECTION 704. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes or as to the value, title or
validity of any Senior Note First Mortgage Bonds or other securities at any time
pledged or deposited with the Trustee hereunder or as to the security offered
thereby or hereby. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Notes or the proceeds
thereof or of any moneys paid to the Company under any provision hereof. The
Trustee shall not be responsible for recording or filing this Indenture, any
indenture supplemented hereto or any financing or continuation statement in any
public office or elsewhere at any time or times.
SECTION 705. May Hold Notes.
The Trustee, any Authenticating Agent, any Paying Agent, any Note
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 608
and 613, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Authenticating Agent, Paying Agent, Note Registrar or
such other agent.
SECTION 706. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
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SECTION 707. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall
be agreed to in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Notes upon all property and
funds held by it hereunder for any amount owing it or any predecessor Trustee
pursuant to this Section 707, except with respect to funds held in trust for the
benefit of the Holders of particular Notes.
Without limiting any rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 601(6) or Section 601(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 708. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to Notes
of more than one series.
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SECTION 709. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Notes of each series, which may be Trustee hereunder for Notes of
one or more other series. Each Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and to
the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Notes of any series shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 710. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 711.
The Trustee may resign at any time with respect to the Notes of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 711 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Notes of such series.
The Trustee may be removed at any time with respect to the Notes of any
series by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series, delivered to the Trustee and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 708 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 709 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Notes, or (B) subject to Section 614, any Holder who
has been a bona
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fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Notes and the appointment of a
successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Notes of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Notes of
that or those series (it being understood that any such successor Trustee may be
appointed with respect to the Notes of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Notes of
any particular series) and shall comply with the applicable requirements of
Section 711. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Notes of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes of such series delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 711, become the successor Trustee with
respect to the Notes of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Notes of any series shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 711, any Holder who
has been a bona fide Holder of a Note of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Notes of such series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Notes of any series and each appointment of a
successor Trustee with respect to the Notes of any series to all Holders of
Notes of such series in the manner provided in Section 106. Each notice shall
include the name of the successor Trustee with respect to the Notes of such
series and the address of its Corporate Trust Office.
SECTION 711. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect
to all Notes, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee, including rights, title and
interest in the Senior Note First Mortgage Bonds; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect
to the Notes of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Notes of one or more
series shall execute and deliver an
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indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Notes of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Notes, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Notes of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (3) shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Notes of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Notes of that or those series to which the appointment of such
successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 712. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
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SECTION 713. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 714. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Notes which shall be authorized to act on behalf of the
Trustee to authenticate Notes of such series issued upon exchange, registration
of transfer or partial redemption thereof or pursuant to Section 306, and Notes
so authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Notes of the
series with respect to which such Authenticating Agent will serve. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its
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predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Notes of such series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By............................
As Authenticating Agent
By............................
Authorized Officer
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ARTICLE EIGHT
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 801. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) fifteen days after each Regular Record Date, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the
Holders of Notes of each series as of such Regular Record Date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Note Registrar.
SECTION 802. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 801 and the names and
addresses of Holders received by the Trustee in its capacity as Note Registrar.
The Trustee may destroy any list furnished to it as provided in Section 801 upon
receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Notes, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 803. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each May 15 following the date of this Indenture deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a).
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A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any Notes
are listed, with the Commission and with the Company. The Company will promptly
notify the Trustee when any Notes are listed on any stock exchange.
SECTION 804. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
ARTICLE NINE
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 901. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership,
unincorporated organization or trust, shall be organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and (a) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium and interest on all the Notes and the performance or
observance of every covenant of this Indenture on the part of the Company to
be performed or observed (b) if such consolidation, merger, conveyance,
transfer, or lease occurs prior to the Release Date, shall expressly assume,
by an indenture supplemental to the First Mortgage, executed and delivered to
the Trustee and the Mortgage Trustee, in form satisfactory to the Trustee and
the Mortgage Trustee, the due and punctual payment of the principal of and
any premium and interest on all of the Senior Note First Mortgage Bonds and
the performance of every covenant of the First Mortgage on the part of the
Company to be performed or observed. For purposes of this Article Nine, the
phrase "assets substantially as an entirety" shall mean 50% or more of the
total assets of the
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Company as shown on the consolidated balance sheet of the Company as of
the end of the calendar year immediately preceding the day of the year in
which such determination is made and nothing in this Indenture shall prevent
or hinder the Company from conveying, transferring or leasing during any
calendar year (in one transaction or a series of transactions) less than 50%
of the amount of its total assets as shown on the consolidated balance sheet
of the Company as of the end of the immediately preceding calendar year;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Notes equally and ratably with (or prior
to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 902. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
901, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Notes.
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ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 1001. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and
in the Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Notes (and if such covenants are to be for
the benefit of less than all series of Notes, stating that such covenants are
expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Notes (and if such additional Events of
Default are to be for the benefit of less than all series of Notes, stating
that such additional Events of Default are expressly being included solely
for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Notes in
bearer form, registrable or not registrable as to principal, and with or
without interest coupons, or to permit or facilitate the issuance of Notes in
uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Notes, provided that any such
addition, change or elimination (A) shall neither (i) apply to any Note of
any series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (ii) modify the rights of the
Holder of any such Note with respect to such provision or (B) shall become
effective only when there is no such Note Outstanding; or
(6) to secure the Notes; or
(7) to establish the form or terms of Notes of any series as permitted
by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Notes of one or more series and to
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
711; or
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(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Indenture, provided that such action pursuant to this
Clause (9) shall not adversely affect the interests of the Holders of Notes
of any series in any material respect.
SECTION 1002. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of a majority in principal amount of the
Outstanding Notes of each series affected by such supplemental indenture, by Act
of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Notes of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby,
(1) change the Stated Maturity of the principal of, or any instalment
of principal of or interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Note or any other Note which would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 602,
or change any Place of Payment where, or the coin or currency in which, any
Note or any premium or interest thereon is payable, or impair the interest
hereunder of the Trustee in the Senior Note First Mortgage Bonds, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or prior to the Release Date, impair the interest
hereunder of the Trustee in the Senior Note First Mortgage Bonds, reduce the
principal amount of any series of Senior Note First Mortgage Bonds to an
amount less than the principal amount of the related series of Notes or alter
the payment provisions of such Senior Note First Mortgage Bonds in a manner
adverse to the Holders of the Notes, or
(2) reduce the percentage in principal amount of the Outstanding Notes
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 613 or
Section 1108, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Note affected thereby;
provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1108, or the
deletion of this proviso, in accordance with the requirements of Sections 711
and 1001(8).
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A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Notes, or which modifies the rights
of the Holders of Notes of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Notes of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 1003. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 701) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 1004. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 1005. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 1006. Reference in Notes to Supplemental Indentures.
Notes of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes of any series so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes of such series.
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ARTICLE ELEVEN
COVENANTS
SECTION 1101. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Notes
that it will duly and punctually pay the principal of and any premium and
interest on the Notes of that series in accordance with the terms of the Notes
and this Indenture.
SECTION 1102. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Notes
an office or agency where Notes of that series may be presented or surrendered
for payment, where Notes of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Notes of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Notes of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 1103. Money for Notes Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Notes, it will, on or before each due date of the principal of
or any premium or interest on any of the Notes of that series, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal and any premium and interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Notes, it will, prior to each due date of the principal of or any premium or
interest on any Notes of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum
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to be held as provided by the Trust Indenture Act, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of Notes other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the Notes
of that series) in the making of any payment in respect of the Notes of that
series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the Notes
of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Note of any series and remaining unclaimed for two years after
such principal, premium or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1104. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
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SECTION 1105. Recording, Filing, etc.; Opinions of Counsel.
The Company will cause this Indenture, any indentures supplemental to this
Indenture, and any financing or continuation statements to be promptly recorded
and filed and rerecorded and refiled in such a manner and in such places, as may
be required by law in order fully to preserve, protect and perfect the security
of the Holders and all rights of the Trustee, and shall deliver to the Trustee:
(a) promptly after the execution and delivery of this Indenture and of any
indenture supplemental to this Indenture but prior to the Release Date, an
Opinion of Counsel either stating that, in the opinion of such counsel, this
Indenture or such supplemental indenture and any financing or continuation
statements have been properly recorded and filed so as to make effective and to
perfect the security interest of the Trustee intended to be created by this
Indenture for the benefit of the Holders from time to time in the Senior Note
First Mortgage Bonds, and reciting the details of such action, or stating that,
in the opinion of such counsel, no such action is necessary to perfect or make
such security interest effective and stating what, if any, action of the
foregoing character may reasonably be expected to become necessary prior to the
next succeeding November 1 to maintain, perfect and make such security interest
effective; and
(b) on or before November 1 of each year, beginning in 1997, and
prior to the Release Date, an Opinion of Counsel either stating that in the
opinion of such counsel such action has been taken, since the date of the most
recent Opinion of Counsel furnished pursuant to this Section 1105(b) or the
first Opinion of Counsel furnished pursuant to Section 1105(a), with respect to
the recording, filing, rerecording, or refiling of this Indenture, each
supplemental indenture and any financing or continuation statements, as is
necessary to maintain and perfect the security interest of the Trustee intended
to be created by this Indenture for the benefit of the Holders from time to time
of the Notes in the Senior Note First Mortgage Bonds, and reciting the details
of such action, or stating that in the opinion of such counsel no such action is
necessary to maintain and perfect such security interest and stating what, if
any, action of the foregoing character may reasonably be expected to become
necessary prior to the next succeeding November 1 to maintain, perfect and make
such security interest effective.
SECTION 1106. Existence.
Subject to Article Nine, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and corporate franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
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SECTION 1107. Maintenance of Properties.
Subject to Article Nine, the Company will cause all properties used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1108. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1109. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Notes of
such series, the Company may, with respect to the Notes of any series, omit in
any particular instance to comply with any term, provision or condition set
forth in any covenant provided pursuant to Section 301(20), 1001(2) or 1001(7)
for the benefit of the Holders of such series or in any of Sections 1107 through
1108 if before the time for such compliance the Holders of a majority in
principal amount of the Outstanding Notes of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
SECTION 1110. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each calendar
year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Notes as of
the end of such year.
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ARTICLE TWELVE
REDEMPTION OF NOTES
SECTION 1201. Applicability of Article.
Notes of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Notes) in accordance with this
Article.
SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes shall be evidenced by a
Board Resolution or in another manner specified as contemplated by Section 301
for such Notes. In case of any redemption at the election of the Company, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date, of the principal amount of Notes of such
series to be redeemed and, if applicable, of the tenor of the Notes to be
redeemed. In the case of any redemption of Notes (a) prior to the expiration of
any restriction on such redemption provided in the terms of such Notes or
elsewhere in this Indenture, or (b) pursuant to an election of the Company which
is subject to a condition specified in the terms of such Notes or elsewhere in
this Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
SECTION 1203. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes of any series are to be redeemed (unless all
the Notes of such series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Note), the particular Notes to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Notes of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of a portion of the principal
amount of any Note of such series, provided that the unredeemed portion of the
principal amount of any Note shall be in an authorized denomination (which shall
not be less than the minimum authorized denomination) for such Note. If less
than all the Notes of such series and of a specified tenor are to be redeemed
(unless such redemption affects only a single Note), the particular Notes to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Notes of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption as aforesaid and, in case of any Notes selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
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The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Note, whether such Note is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Note shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Note.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Notes shall relate, in the case of
any Notes redeemed or to be redeemed only in part, to the portion of the
principal amount of such Notes which has been or is to be redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Notes to be redeemed, at his address appearing in the Note
Register.
All notices of redemption shall identify the Notes to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Notes of any series and of a
specified tenor consisting of more than a single Note are to be redeemed, the
identification (and, in the case of partial redemption of any such Notes, the
principal amounts) of the particular Notes to be redeemed and, if less than
all the Outstanding Notes of any series and of a specified tenor consisting
of a single Note are to be redeemed, the principal amount of the particular
Note to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date,
(5) the place or places where each such Note is to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be
irrevocable.
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SECTION 1205. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1103) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Notes which are
to be redeemed on that date.
SECTION 1206. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that, unless otherwise specified as contemplated by Section
301, installments of interest whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Notes, or one or more
Predecessor Notes, registered as such at the close of business on the relevant
Record Dates according to their terms and the provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the Note.
SECTION 1207. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Note without service
charge, a new Note or Notes of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered.
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ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Notes of any series except as otherwise specified as
contemplated by Section 301 for such Notes.
The minimum amount of any sinking fund payment provided for by the terms
of any Notes is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of such
Notes is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Notes, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 1302. Each sinking fund payment
shall be applied to the redemption of Notes as provided for by the terms of such
Notes.
SECTION 1302. Satisfaction of Sinking Fund Payments with Notes.
The Company (1) may deliver Outstanding Notes of a series (other than any
previously called for redemption) and (2) may apply as a credit Notes of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Notes or through the application of permitted optional
sinking fund payments pursuant to the terms of such Notes, in each case in
satisfaction of all or any part of any sinking fund payment with respect to any
Notes of such series required to be made pursuant to the terms of such Notes as
and to the extent provided for by the terms of such Notes; provided that the
Notes to be so credited have not been previously so credited. The Notes to be so
credited shall be received and credited for such purpose by the Trustee at the
Redemption Price, as specified in the Notes so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 1303. Redemption of Notes for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
Notes, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such Notes
pursuant to the terms of such Notes, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Notes pursuant to Section 1302 and stating
the basis for such credit and that such Notes have not been previously so
credited and will also deliver to the Trustee any Notes to be so delivered. Not
less than 30 days prior to each such sinking fund payment date, the Trustee
shall select the Notes to be redeemed upon such sinking fund payment date in the
manner specified in Section 1203 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided
in Section 1204. Such notice having been duly given, the
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redemption of such Notes shall be made upon the terms and in the manner stated
in Sections 1206 and 1207.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1402 or
Section 1403 applied to any Notes or any series of Notes, as the case may be,
designated pursuant to Section 301 as being defeasible pursuant to such Section
1402 or 1403, in accordance with any applicable requirements provided pursuant
to Section 301 and upon compliance with the conditions set forth below in this
Article. Any such election shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 301 for such Notes.
SECTION 1402. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Notes or any series of Notes, as the case may be, the Company
shall be deemed to have been discharged from its obligations with respect to
such Notes as provided in this Section on and after the date the conditions set
forth in Section 1404 are satisfied (hereinafter called "Defeasance") and the
obligation of the Company to make payment with respect to the principal of and
premium, if may, and interest on the Senior Notes First Mortgage Bonds shall be
satisfied and discharged, as provided in the supplemental trust indenture or
indentures to the First Mortgage creating such Senior Note First Mortgage Bonds
and the Senior Note First Mortgage Bonds shall cease to secure the Notes in any
manner. For this purpose, such Defeasance means that the Company shall be deemed
to have paid and discharged the entire indebtedness represented by such Notes
and to have satisfied all its other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same),
subject to the following which shall survive until otherwise terminated or
discharged hereunder: (1) the rights of Holders of such Notes to receive, solely
from the trust fund described in Section 1404 and as more fully set forth in
such Section, payments in respect of the principal of and any premium and
interest on such Notes when payments are due, (2) the Company's obligations with
respect to such Notes under Sections 304, 305, 306, 1102 and 1103 and with
respect to the Trustee under Section 707, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any Notes notwithstanding the prior exercise of its
option (if any) to have Section 1403 applied to such Notes.
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SECTION 1403. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Notes or any series of Notes, as the case may be, (1) the Company
shall be released from its obligations under Section 901(3), Sections 1107
through 1108, inclusive, and any covenants provided pursuant to Section 301(20),
1001(2), 1001(6) or 1001(7) and 601(8) for the benefit of the Holders of such
Notes and (2) the occurrence of any event specified in Sections 601(4) (with
respect to any of Section 901(3), Sections 1107 through 1108, inclusive, and any
such covenants provided pursuant to Section 301(20), 1001(2), 1001(6) or
1001(7)) and 601(8) shall be deemed not to be or result in an Event of Default
with respect to such Notes as provided in this Section on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section (to the extent so specified in the case of Section 601(4)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and such Notes shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1402
or Section 1403 to any Notes or any series of Notes, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Notes, (A) money in an amount,
or (B) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in
an amount, or (C) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee to pay and
discharge, the principal of and any premium and interest on such Notes on the
respective Stated Maturities or on any Redemption Date established pursuant
to clause (9) below, in accordance with the terms of this Indenture and such
Notes. As used herein, "U.S. Government Obligation" means (x) any security
which is (i) a direct obligation of the United States of America for the
payment of which the full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of the issuer thereof, and
(y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Notes Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the account
of the holder of such depositary receipt, or with respect to any specific
payment of principal of or interest on any U.S.
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Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) In the event of an election to have Section 1402 apply to any Notes
or any series of Notes, as the case may be, the Company shall have delivered
to the Trustee an Opinion of Counsel stating that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this instrument, there has been a change in
the applicable Federal income tax law, in either case (A) or (B) to the
effect that, and based thereon such opinion shall confirm that, the Holders
of such Notes will not recognize gain or loss for Federal income tax purposes
as a result of the deposit, Defeasance and discharge to be effected with
respect to such Notes and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1403 apply to any Notes
or any series of Notes, as the case may be, the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that the Holders of such
Notes will not recognize gain or loss for Federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect to
such Notes and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Notes nor any other Notes of the
same series, if then listed on any securities exchange, will be delisted as a
result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Notes or any other Notes
shall have occurred and be continuing at the time of such deposit or, with
regard to any such event specified in Sections 601(6) and (7), at any time on
or prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Notes are in default within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under such Act or exempt from registration thereunder.
66
<PAGE>
(9) If the Notes are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of
such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1405. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1103, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee pursuant to Section 1404 in respect of any Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any such
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Notes, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Notes.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1404 with
respect to any Notes which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Notes.
SECTION 1406. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Notes by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations under this
Indenture and such Notes from which the Company has been discharged or released
pursuant to Section 1402 or 1403 shall be revived and reinstated as though no
deposit had occurred pursuant to this Article with respect to such Notes, until
such time as the Trustee or Paying Agent is permitted to apply all money held in
trust pursuant to Section 1405 with respect to such Notes in accordance with
this Article; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any such Note following such
reinstatement of its obligations, the Company
67
<PAGE>
shall be subrogated to the rights (if any) of the Holders of such Notes to
receive such payment from the money so held in trust.
-----------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ARIZONA PUBLIC SERVICE COMPANY
By Nancy E. Newquist
...................................
Treasurer
Attest:
Betsy A. Pregulman
............................
Associate Secretary
THE BANK OF NEW YORK, as Trustee
By Walter N. Gitlin
...................................
Vice President
Attest:
Robert E. Patterson
............................
Assistant Vice President
68
<PAGE>
STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
On the 21st day of November before me personally came Nancy E. Newquist,
to me known, who, being by me duly sworn, did depose and say that she is
Treasurer of Arizona Public Service Company, one of the corporations described
in and which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that she signed her name thereto by like authority.
Maria R. Marrs
.....................................
My Commission Expires July 21, 1998
................
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 20th day of November, before me personally came Walter N. Gitlin,
to me known, who, being by me duly sworn, did depose and say that he is Vice
President of The Bank of New York, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
William J. Cassels
.....................................
My Commission Expires May 16, 1998
................
69
------------------------------------------
Exhibit 4.6
ARIZONA PUBLIC SERVICE COMPANY
TO
THE BANK OF NEW YORK
Trustee
----------------------------
First Supplemental Indenture
Dated as of November 15, 1996
To
Indenture
Dated as of November 15, 1996
----------------------------
6 3/4% Senior Notes Due 2006
------------------------------------------
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of November 15, 1996, between
Arizona Public Service Company, a corporation duly organized and existing under
the laws of the State of Arizona (herein called the "Company"), having its
principal office at 400 North Fifth Street, Phoenix, Arizona 85004, and The Bank
of New York, a New York banking corporation, as Trustee (herein called the
"Trustee") under the Indenture dated as of November 15, 1996 between the Company
and the Trustee (the "Indenture")
RECITALS OF THE COMPANY
The Company has executed and delivered the Indenture to the Trustee to
provide for the issuance from time to time of its Senior Notes (the "Notes"),
said Notes to be issued in one or more series as in the Indenture provided.
Pursuant to the terms of the Indenture, the Company desires to provide
for the establishment of a new series of its Notes to be known as its 6 3/4%
Senior Notes Due 2006 (herein called the "Senior Notes Due 2006"), the form and
substance of such Senior Notes Due 2006 and the terms, provisions, and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture.
All things necessary to make this First Supplemental Indenture a valid
agreement of the Company, and to make the Senior Notes Due 2006, when executed
by the Company and authenticated and delivered by the Trustee, the valid
obligations of the Company, have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Senior
Notes Due 2006 by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Senior Notes Due 2006
and the terms, provisions, and conditions thereof, it is mutually agreed, for
the equal and proportionate benefit of all Holders of the Senior Notes Due 2006,
as follows:
ARTICLE ONE
GENERAL TERMS AND CONDITIONS OF
THE SENIOR NOTES DUE 2006
SECTION 101. There shall be and is hereby authorized a series of Notes
designated the "6 3/4% Senior Notes Due 2006," limited in aggregate principal
amount to $100,000,000, which amount shall be as set forth in any Company Order
for the authentication and delivery of Senior Notes Due 2006. The Senior Notes
Due 2006 shall mature and the principal shall be due and payable together with
all accrued and unpaid interest thereon on November 15, 2006, and shall be
issued in the form of registered Senior Notes Due 2006 without coupons.
SECTION 102. The Senior Notes Due 2006 shall be issued in certificated
form, except that the Senior Notes Due 2006 shall be issued initially as a
Global Note to and registered in the name of Cede &Co., as nominee of The
Depository Trust Company, as Depositary
<PAGE>
therefor. Any Senior Notes Due 2006 to be issued or transferred to, or to be
held by, Cede & Co. (or any successor thereof) for such purpose shall bear the
depositary legend in substantially the form set forth at the top of the form of
Senior Note Due 2006 in Article III hereof (in lieu of that set forth in Section
204 of the Indenture), unless otherwise agreed by the Company, such agreement to
be confirmed in writing to the Trustee. Such Global Note may be exchanged in
whole or in part for Senior Notes Due 2006 registered, and any transfer of such
Global Note in whole or in part may be registered, in the name or names of
Persons other than such Depositary or a nominee thereof only under the
circumstances set forth in Clause (2) of the last paragraph of Section 305 of
the Indenture, or such other circumstances in addition to or in lieu of those
set forth in Clause (2) of the last paragraph of Section 305 of the Indenture as
to which the Company shall agree, such agreement to be confirmed in writing to
the Trustee. Principal of, and premium, if any, and interest on the Senior Notes
Due 2006 will be payable, the transfer of Senior Notes Due 2006 will be
registrable and Senior Notes Due 2006 will be exchangeable for Senior Notes Due
2006 bearing identical terms and provisions, at the office or agency of the
Company in the Borough of Manhattan, The City and State of New York; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Security Register.
SECTION 103. Each Senior Note Due 2006 will bear interest at the rate
of 6 3/4% per annum from November 15, 1996 until the principal thereof becomes
due and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable on May 15 and November 15 of each
year (each, an "Interest Payment Date"), commencing on May 15, 1997, to the
person in whose name such Senior Note Due 2006 or any predecessor Senior Note
Due 2006 is registered, at the close of business on the May 1 or November 15
next preceding such Interest Payment Date; provided, however, that the interest
payable at maturity will be payable to the person to whom principal shall be
payable. Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the registered holders on such regular
record date, and may be paid to the person in whose name the Senior Note Due
2006 (or one or more Predecessor Notes) is registered at the close of business
on a special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders of
the Senior Notes Due 2006 not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Senior Notes Due
2006 may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360- day year of twelve 30-day months. Interest will accrue from
November 15, 1996 to, but not including, the relevant payment date. In the event
that any date on which interest is payable on the Senior Notes Due 2006 is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
2
<PAGE>
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. A "Business Day" shall mean any day other than a day on
which banking institutions in The City of New York are authorized or obligated
by law to close.
SECTION 104. The Company, at its option, may redeem all, or, from time
to time, any part of the Senior Notes Due 2006, upon notice as provided in the
Indenture at a redemption price equal to the sum of (a) the principal amount of
the Senior Notes Due 2006 (or portion thereof) being redeemed plus accrued
interest thereon to the redemption date and (b) the Make-Whole Amount (if any)
with respect to the Senior Notes Due 2006 being redeemed.
For purposes of this Section 104, the following terms shall have the
following meanings:
"Make-Whole Amount" means in connection with any optional redemption of
any Senior Notes Due 2006, the excess, if any, of (i) the aggregate present
value as of the date of such redemption of each dollar or principal being
redeemed and the amount of interest (exclusive of interest accrued to the date
of redemption) that would have been payable in respect of each such dollar if
such redemption had not been made determined by discounting, on a semi-annual
basis, such principal and interest at the Reinvestment Rate (determined on the
third Business Day preceding the date such notice of redemption is given) from
the respective dates on which such principal and interest would have been
payable, if such redemption had not been made, over (ii) the aggregate principal
amount of the Senior Notes Due 2006 being redeemed.
"Reinvestment Rate" means 0.10% plus the arithmetic mean of the yields
under the respective heading "Week Ending" published in the most recent
Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the remaining life to
maturity, as of the payment date of the principal being redeemed or paid. If no
maturity exactly corresponds to such maturity, yields for the two published
maturities most closely corresponding to such maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate shall
be interpolated or extrapolated from such yields on a straight-line basis
rounding in each of such relevant periods to the nearest month. For the purpose
of calculating the Reinvestment Rate, the most recent Statistical Release
published prior to the date of determination of the Make-Whole Amount shall be
used.
"Statistical Release" means the statistical release designed
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
Stated government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination under the
Indenture, then such other reasonably comparable index which shall be designated
by the Company.
3
<PAGE>
The Trustee shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in acting upon the
Company's calculation of any redemption price, including any Make-Whole Amount
(if any).
SECTION 105. The related series of Senior Note First Mortgage Bonds for
the Senior Notes Due 2006 is the Company's First Mortgage Bonds, Senior Notes
Series A (the "Senior Note Series A Bonds").
SECTION 106. When the obligation of the Company to make payments with
respect to the principal of, and premium, if any, and interest on all or any
part of the Senior Note Series A Bonds shall be satisfied or deemed satisfied
pursuant to Section 403, Section 501, or Article 14 of the Indenture or pursuant
to Section 104 of this First Supplemental Indenture, the Trustee shall, upon
written request of the Company and the receipt of the certificate of the Expert
described in Section 404(b) of the Indenture (if such certificate is then
required by Section 404(b) of the Indenture), deliver to the Company without
charge therefor all of the Senior Note Series A Bonds so satisfied or deemed
satisfied, together with such appropriate instruments of transfer or release as
may be reasonably requested by the Company. All Senior Note Series A Bonds
delivered to the Company in accordance with this Section 106 shall be delivered
by the Company to the First Mortgage Trustee for cancellation.
SECTION 107. The Senior Notes Due 2006 shall be defeasable pursuant to
Section 1402 and Section 1403 of the Indenture.
ARTICLE TWO
ADDITIONAL COVENANTS
SECTION 201. (a) From and after the Release Date and so long as any
Senior Notes Due 2006 are Outstanding, the Company will not issue, assume, or
guarantee any Debt secured by any mortgage, security interest, pledge, or lien
(herein referred to as a "mortgage") of or upon any Operating Property of the
Company, whether owned at the date of the Indenture or thereafter acquired, and
will not permit to exist any Debt secured by a mortgage on any Operating
Property created on or prior to the Release Date, without in any such case
effectively securing, on the later to occur of the issuance, assumption, or
guarantee of any such Debt or the Release Date, the Outstanding Senior Notes Due
2006 (together with, if the Company shall so determine, any other Note or Debt
of or guaranteed by the Company ranking senior to, or equally with, the Notes)
equally and ratably with such Debt; provided, however, that the foregoing
restriction shall not apply to Debt secured by any of the following:
(1) mortgages on any property existing at the
time of acquisition thereof;
4
<PAGE>
(2) mortgages on property of a corporation
existing at the time such corporation is
merged into or consolidated with the
Company, or at the time of a sale, lease, or
other disposition of the properties of such
corporation or a division thereof as an
entirety or substantially as an entirety to
the Company, provided that such mortgage as
a result of such merger, consolidation,
sale, lease, or other disposition is not
extended to property owned by the Company
immediately prior thereto;
(3) mortgages on property to secure all or part
of the cost of acquiring, constructing,
developing, or substantially repairing,
altering, or improving such property, or to
secure indebtedness incurred to provide
funds for any such purpose or for
reimbursement of funds previously expended
for any such purpose, provided such
mortgages are created or assumed
contemporaneously with, or within eighteen
(18) months after, such acquisition or
completion of construction, development, or
substantial repair, alteration, or
improvement or within six (6) months
thereafter pursuant to a commitment for
financing arranged with a lender or investor
within such eighteen (18) month period;
(4) mortgages in favor of the United States of
America or any State thereof, or any
department, agency, or instrumentality or
political subdivision of the United States
of America or any State thereof, or for the
benefit of holders of securities issued by
any such entity, to secure any Debt incurred
for the purpose of financing all or any part
of the purchase price or the cost of
constructing, developing, or substantially
repairing, altering, or improving the
property subject to such mortgages; or
(5) any extension, renewal or replacement (or
successive extensions, renewals, or
replacements), in whole or in part, of any
mortgage referred to in the foregoing
clauses (1) to (4), inclusive; provided,
however, that the principal amount of Debt
secured thereby and not otherwise authorized
by said clauses (1) to (4), inclusive, shall
not exceed the principal amount of Debt,
plus any premium or fee payable in
connection with any such extension, renewal,
or replacement, so secured at the time of
such extension, renewal, or replacement.
(b) Notwithstanding the provisions of
Section 201(a), from and after the Release Date and so long as any Senior Notes
Due 2006 are Outstanding, the Company may issue, assume, or guarantee Debt, or
permit to exist Debt, secured by
5
<PAGE>
mortgages which would otherwise be subject to the restrictions of Section 201(a)
up to an aggregate principal amount that, together with the principal amount of
all other Debt of the Company secured by mortgages (other than mortgages
permitted by Section 201(a) that would otherwise be subject to the foregoing
restrictions) and the Value of all Sale and Lease-Back Transactions in existence
at such time (other than any Sale and Lease-Back Transaction that, if such Sale
and Lease-Back Transaction had been a mortgage, would have been permitted by
Section 201(a), other than Sale and Lease-Back Transactions permitted by Section
202 because the commitment by or on behalf of the purchaser was obtained no
later than eighteen (18) months after the later of events described in (i) or
(ii) of Section 202, and other than Sale and Lease-Back Transactions as to which
application of amounts have been made in accordance with clause (z) of Section
202), does not at the time exceed the greater of ten percent (10%) of Net
Tangible Assets or ten percent (10%) of Capitalization.
(c) If at any time the Company shall issue,
assume, or guarantee any Debt secured by any mortgage and if Section 201(a)
requires that the Outstanding Senior Notes Due 2006 be secured equally and
ratably with such Debt, the Company will promptly execute, at its expense, any
instruments necessary to so equally and ratably secure the Outstanding Senior
Notes Due 2006 and deliver the same to the Trustee along with:
(1) An Officers' Certificate stating that the
covenant of the Company contained in Section
201(a) has been complied with; and
(2) An Opinion of Counsel to the effect that the
Company has complied with the covenant
contained in Section 201(a), and that any
instrument executed by the Company in the
performance of such covenant complies with
the requirements of such covenant.
In the event that the Company shall hereafter secure
Outstanding Senior Notes Due 2006 equally and ratably with any other obligation
or indebtedness (including other Notes) pursuant to the provisions of this
Section 201, the Trustee is hereby authorized to enter into an indenture or
agreement supplemental hereto and to take such action, if any, as it may, in its
sole and absolute discretion, deem advisable to enable it to enforce effectively
the rights of the Holders of Outstanding Senior Notes Due 2006 so secured,
equally and ratably with such other obligation or indebtedness.
SECTION 202. From and after the Release Date and so long as any Senior
Notes Due 2006 are outstanding, the Company will not enter into any Sale and
Lease-Back Transaction with respect to any Operating Property and will not
permit to remain in effect any Sale and Lease-Back Transaction entered into on
or prior to the Release Date with respect to any Operating Property if, in any
case, the commitment by or on behalf of the purchaser is or was obtained more
than eighteen (18) months after the later of (i) the completion of the
acquisition, construction, or development of such Operating Property or (ii) the
placing in
6
<PAGE>
operation of such Operating Property or of such Operating Property as
constructed, developed, or substantially repaired, altered, or improved, unless
(x) the Company would be entitled pursuant to Section 201(a) to issue, assume,
or guarantee Debt secured by a mortgage on such Operating Property without
equally and ratably securing the Senior Notes Due 2006 or (y) the Company would
be entitled pursuant to Section 201(b), after giving effect to such Sale and
Lease-Back Transaction, to incur $1.00 of additional Debt secured by mortgages
(other than mortgages permitted by Section 201(a)) or (z) the Company shall
apply or cause to be applied, in the case of a sale or transfer for cash, an
amount equal to the net proceeds thereof (but not in excess of the net book
value of such Operating Property at the date of such sale or transfer) and, in
the case of a sale or transfer otherwise than for cash, an amount equal to the
fair value (as determined by the Board of Directors) of the Operating Property
so leased, to the retirement, within one hundred eighty (180) days after the
later to occur of the effective date of such Sale and Lease-Back Transaction or
the Release Date, of Notes or other Debt of the Company ranking senior to, or
equally with, the Senior Notes Due 2006; provided, however, that any such
retirement of Notes shall be in accordance with the terms and provisions of the
Indenture and the Notes; provided, further, that the amount to be applied to
such retirement of Notes or other Debt shall be reduced by an amount equal to
the sum of (a) an amount equal to the redemption price with respect to Notes
delivered within such one hundred eighty (180)-day period to the Trustee for
retirement and cancellation and (b) the principal amount, plus any premium or
fee paid in connection with any redemption in accordance with the terms of other
Debt voluntarily retired by the Company within such one hundred eighty (180)-day
period, excluding in each case retirements pursuant to mandatory sinking fund or
prepayment provisions and payments at maturity.
SECTION 203. Definitions
For purposes of Section 201 and Section 202 of this First Supplemental
Indenture, the following terms shall have the following meanings:
"Capitalization" means the total of all the following items appearing
on, or included in, the consolidated balance sheet of the Company: (i)
liabilities for indebtedness maturing more than twelve (12) months from the date
of determination; and (ii) common stock, preferred stock, premium on capital
stock, capital surplus, capital in excess of par value, and retained earnings
(however the foregoing may be designated), less, to the extent not otherwise
deducted, the cost of shares of capital stock of the Company held in its
treasury.
Subject to the foregoing, Capitalization shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged and that are
approved by independent accountants regularly retained by the Company, and may
be determined as of a date not more than (sixty) 60 days prior to the happening
of an event for which such determination is being made.
7
<PAGE>
The term "Debt" means any outstanding debt for money borrowed evidenced
by notes, debentures, bonds, or other securities.
The term "Net Tangible Assets" means the amount shown as total assets
on the consolidated balance sheet of the Company, less the following: (i)
intangible assets including, but without limitation, such items as goodwill,
trademarks, trade names, patents, and unamortized debt discount and expense and
other regulatory assets carried as an asset on the Company's consolidated
balance sheet; and (ii) appropriate adjustments, if any, on account of minority
interests.
Net Tangible Assets shall be determined in accordance with generally
accepted accounting principles and practices applicable to the type of business
in which the Company is engaged and that are approved by the independent
accountants regularly retained by the Company, and may be determined as of a
date not more than (sixty) 60 days prior to the happening of the event for which
such determination is being made.
The term "Operating Property" means (i) any interest in real property
owned by the Company and (ii) any asset owned by the Company that is depreciable
in accordance with generally accepted accounting principles.
The term "Sale and Lease-Back Transaction" means any arrangement with
any person providing for the leasing to the Company of any Operating Property
(except for temporary leases for a term, including any renewal thereof, of not
more than forty-eight (48) months), which Operating Property has been or is to
be sold or transferred by the Company to such person.
The term "Value" means, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (1)
the net proceeds to the Company from the sale or transfer of the property leased
pursuant to such Sale and Lease-Back Transaction or (2) the net book value of
such property, as determined in accordance with generally accepted accounting
principles by the Company at the time of entering into such Sale and Lease-Back
Transaction, in either case multiplied by a fraction, the numerator of which
shall be equal to the number of full years of the term of the lease that is part
of such Sale and Lease-Back Transaction remaining at the time of determination
and the denominator of which shall be equal to the number of full years of such
term, without regard, in any case, to any renewal or extension options contained
in such lease.
ARTICLE THREE
FORM OF SENIOR NOTE DUE 2006
SECTION 301. The Senior Notes Due 2006 and the Trustee's certificate of
authentication to be endorsed are to be substantially in the following forms:
8
<PAGE>
Form of Face of Note.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC
SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ARIZONA PUBLIC SERVICE COMPANY
6-3/4% Senior Notes Due 2006
No. _____ $100,000,000
CUSIP No.________
Arizona Public Service Company, a corporation duly organized and existing
under the laws of Arizona (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of One Hundred Million Dollars on November 15, 2006, and to pay
interest thereon from November 15, 1996 or from the most recent Interest Payment
Date with respect to which interest has been paid or duly provided for,
semi-annually on May 15 and November 15 in each year, commencing May 15, 1997,
at the rate of 6-3/4% per annum, until the principal hereof is paid or made
available for payment, provided that any principal and premium, and any such
instalment of interest, which is overdue shall bear interest at the rate of
6-3/4% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall be the May 1
or November 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid
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<PAGE>
to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and such interest on
this Note will be made at the office or agency of the Company maintained for
that purpose in The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set forth
below, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By_____________________________________
Attest:
__________________________________
Form of Reverse of Note.
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes"), issued and to be issued in one or more series under
an Indenture, dated as of November 15, 1996 (herein called the "Indenture",
which term shall have the meaning assigned to it in such instrument), between
the Company and The Bank of New York, as Trustee (herein
10
<PAGE>
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, limited in aggregate principal
amount to $100,000,000.
Prior to the Release Date (as hereinafter defined), this Note will be
secured by First Mortgage Bonds, Senior Note Series A (the "Senior Note Series A
Bonds") delivered by the Company to the Trustee for the benefit of the Holders
of the series of Notes of which this Note is a part, issued under the Mortgage
and Deed of Trust, dated as of July 1, 1946, from the Company to The Bank of New
York, as successor trustee (the "Mortgage Trustee"), as supplemented and amended
(the "First Mortgage"). Reference is made to the First Mortgage for a
description of property mortgaged and pledged, the nature and extent of the
security, the rights of the holders of the first mortgage bonds under the First
Mortgage and of the Mortgage Trustee in respect thereof, the duties and
immunities of the Mortgage Trustee and the terms and conditions upon which the
Senior Note Series A Bonds are secured and the circumstances under which
additional first mortgage bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR
NOTE FIRST MORTGAGE BONDS, AS SUCH TERM IS DEFINED IN THE INDENTURE) HAVE BEEN
RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE
MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS
SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.
The Notes of this series are subject to redemption upon not less than 30
days' notice by mail at any time at the option of the Company, in whole or from
time to time in part, at a redemption price equal to the sum of (i) the
principal amount of the Notes (or portion thereof) being redeemed plus accrued
interest thereon to the redemption date and (ii) the Make-Whole Amount (as
defined below), if any, with respect to the Notes being redeemed (the
"Redemption Price").
If notice has been given as provided in the Indenture and funds for the
redemption of any Notes (or any portion thereof) called for redemption shall
have been made available on the redemption date referred to in such notice, such
Notes (or any portion thereof) will cease to bear interest on the date fixed for
such redemption specified in such notice and the only right of the Holders of
such Notes will be to receive payment of the Redemption Price.
Notice of any optional redemption of Notes of this series (or any portion
thereof) will be given to Holders at their addresses, as shown in the security
register for such Notes, not more than 60 nor less than 30 days prior, to the
date fixed for redemption. The notice of redemption will specify, among other
items, the Redemption Price and the principal amount of the Notes held by such
Holder to be redeemed. If less than all of the Notes are to be redeemed at the
11
<PAGE>
option of the Company, the Trustee shall select, in such manner as it shall deem
fair and appropriate, the portion of such Note to be redeemed in whole or in
part.
As used herein:
"Make-Whole Amount" means, in connection with any optional redemption
of any Notes, the excess, if any, of (i) the aggregate present value as of
the date of such redemption of each dollar of principal being redeemed and
the amount of interest (exclusive of interest accrued to the date of
redemption) that would have been payable in respect of each such dollar if
such redemption had not been made, determined by discounting, on a
semi-annual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given) from the respective dates on which such principal and
interest would have been payable if such redemption had not been made,
over (ii) the aggregate principal amount of the Notes being redeemed.
"Reinvestment Rate" means 0.10% plus the arithmetic mean of the yields
under the respective heading "Week Ending" published in the most recent
Statistical Release under the caption "Treasury Constant Maturities" for
the maturity (rounded to the nearest month) corresponding to the remaining
life to maturity as of the payment date of the principal being redeemed.
If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis rounding in each of such relevant periods to the
nearest month. For the purpose of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designed
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded
United States government securities adjusted to constant maturities, or,
if such statistical release is not published at the time of any
determination under the Indenture, then such other reasonably comparable
index which shall be designated by the Company.
The Notes of this series will not be subject to any sinking fund.
In the event of redemption of this Note in part only, a new Note or Notes
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Note or certain restrictive covenants and Events of Default
with respect to this Note, in each case upon compliance with certain conditions
set forth in the Indenture.
12
<PAGE>
If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.
If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture and, upon such
declaration, the Trustee can demand the acceleration of the payment of principal
of the Senior Note Series A Bonds as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Notes at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes of this series, the Holders of not less than 25% in principal amount of
the Notes of this series at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not
have received from the Holders of a majority in principal amount of Notes of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement of
any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any place where the principal of and any
13
<PAGE>
premium and interest on this Note are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Note Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series and of
like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
Form of Trustee's Certificate of Authentication.
CERTIFICATION OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in the
within-mentioned Indenture.
Dated: THE BANK OF NEW YORK,
As Trustee
By______________________________
Authorized Signatory
ARTICLE FOUR
ORIGINAL ISSUE OF SENIOR NOTES DUE 2006
SECTION 401. Senior Notes Due 2006 in the aggregate principal amount of
$100,000,000, may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Notes to or upon the written order of the Company,
14
<PAGE>
signed by its Chairman, its President, or any Vice President and its Treasurer
or an Assistant Treasurer, without any further action by the Company.
ARTICLE FIVE
PAYING AGENT AND REGISTRAR
SECTION 501. The Bank of New York will be the Paying Agent and Note
Registrar for the Senior Notes Due 2006.
ARTICLE SIX
SUNDRY PROVISIONS
SECTION 601. Except as otherwise expressly provided in this First
Supplemental Indenture or in the form of Senior Notes Due 2006 or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Senior Notes Due 2006 that are defined in the Indenture shall have
the several meanings respectively assigned to them thereby.
SECTION 602. The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects and confirmed, and this First Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.
SECTION 603. The Trustee hereby accepts the trusts herein declared,
provided, created, supplemented, or amended and agrees to perform the same upon
the terms and conditions herein and in the Indenture, as heretofore supplemented
and amended, set forth and upon the following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this First Supplemental Indenture or
for or in respect of the recitals contained herein, all of which recitals are
made by the Company solely. In general, each and every term and condition
contained in Article Seven of the Indenture shall apply to and form part of this
First Supplemental Indenture with the same force and effect as if the same were
herein set forth in full with such omissions, variations, and insertions, if
any, as may be appropriate to make the same conform to the provisions of this
First Supplemental Indenture.
--------------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
ARIZONA PUBLIC SERVICE COMPANY
By: Nancy E. Newquist
----------------------------
Nancy E. Newquist
Treasurer
Attest:
Betsy A. Pregulman
- ----------------------
Associate Secretary
THE BANK OF NEW YORK, as Trustee
By: Walter N. Gitlin
----------------------------
Vice President
Attest:
Robert E. Patterson
- ------------------------
Assistant Vice President
16
<PAGE>
STATE OF ARIZONA )
) ss:
COUNTY OF MARICOPA )
On the 21st day of November, 1996, before me personally came Nancy E.
Newquist, to me know, who, being by me duly sworn, did depose and say that she
is the Treasurer of Arizona Public Service Company, one of the corporations
described in and which executed the foregoing instrument; that she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that she signed her name thereto by like authority.
Maria R. Marrs
---------------------
NOTARY PUBLIC
My Commission Expires: July 21, 1998
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 20th day of November, 1996, before me personally came Walter N.
Gitlin, to me know, who, being by me duly sworn, did depose and say that he is
the Vice President of The Bank of New York, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
William J. Cassels
----------------------
NOTARY PUBLIC
My Commission Expires:
May 16, 1998
- ---------------------- 17
Exhibit 4.7
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC
SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ARIZONA PUBLIC SERVICE COMPANY
6-3/4% Senior Notes Due 2006
No. A-1 $100,000,000
CUSIP No. 040555BX1
Arizona Public Service Company, a corporation duly organized and existing
under the laws of Arizona (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of One Hundred Million Dollars on November 15, 2006, and to pay
interest thereon from November 15, 1996 or from the most recent Interest Payment
Date with respect to which interest has been paid or duly provided for,
semi-annually on May 15 and November 15 in each year, commencing May 15, 1997,
at the rate of 6-3/4% per annum, until the principal hereof is paid or made
available for payment, provided that any principal and premium, and any such
instalment of interest, which is overdue shall bear interest at the rate of
6-3/4% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall be the May 1
or November 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Notes of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes of this series may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
said Indenture.
Payment of the principal of (and premium, if any) and such interest on
this Note will be made at the office or agency of the Company maintained for
that purpose in The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
<PAGE>
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set forth
below, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By_____________________________________
Attest:
______________________________________
3
<PAGE>
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes"), issued and to be issued in one or more series under
an Indenture, dated as of November 15, 1996 (herein called the "Indenture",
which term shall have the meaning assigned to it in such instrument), between
the Company and The Bank of New York, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered. This Note is one of the series
designated on the face hereof, limited in aggregate principal amount to
$100,000,000.
Prior to the Release Date (as hereinafter defined), this Note will be
secured by First Mortgage Bonds, Senior Note Series A (the "Senior Note Series A
Bonds") delivered by the Company to the Trustee for the benefit of the Holders
of the series of Notes of which this Note is a part, issued under the Mortgage
and Deed of Trust, dated as of July 1, 1946, from the Company to The Bank of New
York, as successor trustee (the "Mortgage Trustee"), as supplemented and amended
(the "First Mortgage"). Reference is made to the First Mortgage for a
description of property mortgaged and pledged, the nature and extent of the
security, the rights of the holders of the first mortgage bonds under the First
Mortgage and of the Mortgage Trustee in respect thereof, the duties and
immunities of the Mortgage Trustee and the terms and conditions upon which the
Senior Note Series A Bonds are secured and the circumstances under which
additional first mortgage bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR
NOTE FIRST MORTGAGE BONDS, AS SUCH TERM IS DEFINED IN THE INDENTURE) HAVE BEEN
RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE
MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS
SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.
The Notes of this series are subject to redemption upon not less than 30
days' notice by mail at any time at the option of the Company, in whole or from
time to time in part, at a redemption price equal to the sum of (i) the
principal amount of the Notes (or portion thereof) being redeemed plus accrued
interest thereon to the redemption date and (ii) the Make-Whole Amount (as
defined below), if any, with respect to the Notes being redeemed (the
"Redemption Price").
If notice has been given as provided in the Indenture and funds for the
redemption of any Notes (or any portion thereof) called for redemption shall
have been made available on the redemption date referred to in such notice, such
Notes (or any portion thereof) will cease to bear interest on the date fixed for
such redemption specified in such notice and the only right of the Holders of
such Notes will be to receive payment of the Redemption Price.
Notice of any optional redemption of Notes of this series (or any portion
thereof) will be given to Holders at their addresses, as shown in the security
register for such Notes, not more than 60 nor less than 30 days prior, to the
date fixed for redemption. The notice of redemption will specify, among other
items, the Redemption Price and the principal amount of the Notes held by such
Holder to be redeemed. If less than all of the Notes are to be redeemed at the
option of the Company, the Trustee shall select, in such manner as it shall deem
fair and appropriate, the portion of such Note to be redeemed in whole or in
part.
4
<PAGE>
As used herein:
"Make-Whole Amount" means, in connection with any optional redemption
of any Notes, the excess, if any, of (i) the aggregate present value as of
the date of such redemption of each dollar of principal being redeemed and
the amount of interest (exclusive of interest accrued to the date of
redemption) that would have been payable in respect of each such dollar if
such redemption had not been made, determined by discounting, on a
semi-annual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given) from the respective dates on which such principal and
interest would have been payable if such redemption had not been made,
over (ii) the aggregate principal amount of the Notes being redeemed.
"Reinvestment Rate" means 0.10% plus the arithmetic mean of the yields
under the respective heading "Week Ending" published in the most recent
Statistical Release under the caption "Treasury Constant Maturities" for
the maturity (rounded to the nearest month) corresponding to the remaining
life to maturity as of the payment date of the principal being redeemed.
If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis rounding in each of such relevant periods to the
nearest month. For the purpose of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designed
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded
United States government securities adjusted to constant maturities, or,
if such statistical release is not published at the time of any
determination under the Indenture, then such other reasonably comparable
index which shall be designated by the Company.
The Notes of this series will not be subject to any sinking fund.
In the event of redemption of this Note in part only, a new Note or Notes
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Note or certain restrictive covenants and Events of Default
with respect to this Note, in each case upon compliance with certain conditions
set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.
If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture and, upon such
declaration, the Trustee can demand the acceleration of the payment of principal
of the Senior Note Series A Bonds as provided in the Indenture.
5
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Notes at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes of this series, the Holders of not less than 25% in principal amount of
the Notes of this series at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not
have received from the Holders of a majority in principal amount of Notes of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement of
any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and interest on
this Note are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Note Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
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Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in the
within-mentioned Indenture.
Dated: THE BANK OF NEW YORK,
As Trustee
By______________________________
Authorized Signatory
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